Mortgages with a County Court Judgement (CCJ)

  • Mortgages with County Court Judgement’s
  • Bad credit experts
  • Not tied to a panel of lenders
  • 5* service

Mortgages with a County Court Judgement (CCJ)

  • Mortgages with County Court Judgement’s
  • Bad credit experts
  • Not tied to a panel of lenders
  • 5* service

Getting a mortgage with a CCJ

A poor credit rating can be caused by any of a variety of events, such as missed repayments on loans, late payments on cards and outright payment defaults. Even the lack of a credit history can make life extremely difficult when you need to apply for a mortgage. These various ‘bad credit events’ affect your credit score in different ways.

One of the most detrimental things you can have linked to your name with regard to your credit status is a County Court Judgment, or CCJ, which can hamper your chances of getting a credit card, opening a bank account – or be finding a mortgage.

What is a CCJ?

A County Court Judgment (CCJ) is a court order made in England, Wales or Northern Ireland that can be registered against you if you fail to make your agreed repayments. CCJs can be issued against both individuals and companies.

Bear in mind that by the time you get to this stage you will have had quite a bit of correspondence from your creditor. As well as regular bills and reminders, there will have been a formal letter warning you that if you do not repay the debt – or do not get in touch to make arrangements to pay it – legal action will commence. It will also explain what steps you can take to stop proceedings from going ahead.

If you take no action at this stage, the next thing you will receive will be a County Court claim form. It is essential that you respond to this promptly. If you do, you can explain your financial circumstances, which will then be taken into account when a judgment is made. If you do not, you might be ordered to pay the amount in full, immediately. You must also respond, of course, if you dispute the debt, as you will need to put your side of the story forward.

If the court decides there is a debt to pay, you will be sent a judgment detailing:

  • How much you owe
  • How you should pay (in full or by instalments)
  • The payment deadline
  • Who you should pay

At this point, if you pay the debt in full (including any interest and court fees) you will avoid having a CCJ recorded against you. If you do not, then it will be entered on the Register of Judgments, Orders and Fines, which means it will also show on your credit record.

Records of judgments remain on the Register of Judgments, Orders and Fines – and therefore also on your credit report – for six years.

From our own research we have found that 71% of people do not know how long a CCJ takes to be forgotten and, what is more surprising, 40% of people thought a CCJ was a permanent mark on their credit record.

The good news here is that this is not the case, all bad credit marks are removed from your credit file in the end and you do not even have to wait for this to happen before being considered for a mortgage. With the right expertise and guidance it may be possible for you to get a mortgage sooner than you might have expected.

As we mentioned above, if you pay the debt in full (including any interest and court fees) within one month of receiving the judgment, you will not even have a CCJ recorded against you. If you clear the debt more than one month after receiving the judgment, it is marked in the CCJ register as ‘satisfied’, so people will know you have paid.

Credit reference agencies gather information about how people manage their credit and debt payments and they make that information available to lenders, to help them make decisions as to who to extend credit to.

They gather two main types of information: credit account information and public information.

Credit account information relates to how much people owe the various lenders they have accounts with, and how they are managing those accounts.

Public information relates to bankruptcies, debt relief orders, individual voluntary arrangements (IVAs), and administration orders; it also includes information held on the electoral roll, and the Register of Judgments, Orders and Fines.

CCJs, therefore, fall under the heading of public information. Anyone searching the CCJ register will see the information relating to it.

Whenever you apply for a financial product like a mortgage, personal loan or even a mobile phone contract, lenders will use the information contained on your credit file to assess whether you are creditworthy. A CCJ will remain on your credit record for 6 years, but if it has been marked as ‘satisfied’, they will know that you settled your debt. CCJs after 6 years, typically have no impact on your credit score.

If you have been refused credit in the past and you are not sure why, you can access the Register of Judgments, Orders and Fines for a one-off fee of £4.00 and do a CCJ check against your name. Alternatively, you could ask to see a copy of the information held on you by the credit reference agencies.

We often receive enquiries from people asking ‘How do I know if I’ve got CCJs?’, so do not worry if you are not sure where you stand. Maybe the circumstances around the debt were not clear, or for whatever reason you were unable to deal with the paperwork at the time, or perhaps the related correspondence never reached you in the first place.

Most people will receive a notification from the courts outlining the details, but if you are not sure, or if you cannot remember how long ago it all happened, you can always find out by searching the CCJ register.

 

Can I get a mortgage with CCJs?

The good news is that yes, it is possible to gain a mortgage when you have one or more CCJs on your credit file. However, there are a number of key elements that will impact on a lender’s decision. These include:

  1. How recently the CCJ was registered: the older a CCJ is, the better. If it was registered more than three years ago then you stand a better chance than if it was registered within the last year. One thing that will help if you have a recently registered CCJ is having a good sized deposit.
  2. The number of CCJs: if you have one or more recent CCJs, then your options are more limited than if you have just one CCJ registered a number of years ago. As a general rule, if you are seeking a mortgage with a high loan-to-value (LTV) ratio, then a lender will not want to see more than two CCJs registered in the last two years. If you have a bigger deposit then they are likely to be more flexible, provided the CCJs are over twelve months old.
  3. How much the CCJ was for: some lenders have rules regarding the value of CCJs that affect the LTV ratio they are prepared to offer. Incidentally, that does not mean if you have larger value CCJs you cannot get a mortgage, but you should expect to have to accept a lower LTV – say 65% to 75%.

 

Age of CCJ Possible LTV Effect
Less than 12 months If the CCJ was registered within the last twelve months, then it should be a maximum of £1,000 for you to be considered for an 85% LTV mortgage.
Within 24 months If the CCJ was registered within the last twelve to twenty-four months, then it should be a maximum of £2,500 for you to be considered for an 85% LTV mortgage.
+2 Years If the CCJ is more than two years old then the amount will have little effect. If it is more recent, however, the value will have an impact on any possible loan offer.
  1. Whether the CCJ is marked as ‘satisfied’, and when it was satisfied: if your CCJ is satisfied you will have a bigger pool of lenders to choose from, but if it is not you should still have options.
Status of CCJ Impact on lending
Can I get a mortgage with a satisfied CCJ? Those lenders that insist a CCJ has been satisfied fall into two categories: those that insist it has been satisfied for a minimum of 12 months before a mortgage application is made, and those that are happy so long as it is satisfied prior to the application.
Can I get a mortgage with an unsatisfied CCJ? If your CCJ remains unsatisfied – and you do not want to part with the money to see that it is – then the date it was registered is important. There are specialist lenders who will consider your application, but they are likely to insist the CCJs are at least two years old.

All mortgages, irrespective of the credit status of the applicant, are subject to an affordability assessment as part of the process of working out what amount of mortgage will be offered.

For people with CCJs on their credit record, this may be assessed differently, especially if the CCJs are recent and/or unsatisfied. This may mean that while you are accepted, you are not allowed to borrow as much as if you had no CCJs – and the mortgage may also cost you more, in terms of interest and fees

Bear in mind, however, that most issues are surmountable, and a specialist mortgage broker can help navigate the obstacles and options.

Repair your credit score

If you have a CCJ against your name, all is not lost. Not only can we canvass the market to help you find a great deal on a bad credit mortgage with a CCJ, but there are also a number of steps you can take to improve your credit rating.

Take a look at our tips to improve your damaged credit rating and access the very best mortgage rates.

At Just Mortgage Brokers, we have a specialist bad credit team that endeavour to help our clients secure affordable bad credit mortgages with CCJs and other adverse credit events. Those with mixed credit histories are usually best served by specialist lenders that cannot be found on the high street. With years of experience working with a network of bad credit lenders across the UK, we know exactly where to turn to find a mortgage to suit the particular needs of each and every client, regardless of their credit history. As unlimited market brokers, we have access to a wide section of the market, which means we are not tied to products from any particular lender. This impartiality and unlimited access to the market gives us the very best chance of obtaining a competitively priced bad credit mortgage with a CCJ.

– What is a CCJ?

A County Court Judgment, or CCJ, is a court order that can be registered against either an individual or a company if they fail to keep up their debt repayments. They apply in England, Wales and Northern Ireland.

Creditors generally only resort to legal action after they have sent a number of bills and reminders that have been ignored. The final communication will be a formal letter warning that if you don’t respond, legal action will commence.

If you don’t do anything, the case will proceed and if the court agrees there’s a debt to be paid, you’ll be sent a judgment containing all the details. The amount owed will now include any interest and court fees that apply. If you don’t pay within a month, then a CCJ will be recorded against you.

CCJs are recorded in the Register of Judgments, Orders and Fines, and also show on your credit record. Records of judgments remain on the Register – and also on your credit report – for six years.

 

– How do I pay off my CCJ?

If you are taken to court by someone you owe money to and the court agrees there is a debt to be paid, you will be sent a judgment. This will include all the relevant details you need to know, and will tell you:

  • How much you owe; this will be the amount of the original debt, plus any interest or court fees that have been added.
  • Who you should pay; don’t automatically assume you should send the money to the court, it is more likely you will need to pay the creditor.
  • When you should pay by.
  • How you should pay; if you have explained that you are in financial difficulties, the court may allow you to pay in instalments. The judgment will tell you how much and how often, and you should agree the payment method (e.g. monthly standing order) with whoever you owe.

– How can I remove a CCJ?

A CCJ will typically remain on your credit report for six years from the date it is registered. It can be removed should it be paid within 30 days of having the CCJ registered against you or where it is acknowledged by the claimant as being registered in error. We suggest you initially contact the company involved together with the credit reference agency it is registered with.

– Do I need to satisfy my CCJ before I can obtain a mortgage?

Not necessarily, no. Different lenders have different criteria, but for many the main considerations are:

  • How long ago the CCJ was recorded – generally the longer ago it was, the better, but there are lenders who will consider applications from people with more recent CCJs.
  • How much the CCJ was for – this, and the age of the CCJ, can affect the loan-to-value ratio a lender is prepared to offer.
  • How many CCJs were recorded – one or more recent CCJs will have a bigger impact than one historical CCJ.
  • What other credit problems you have had since (if any).

– What is the maximum size CCJ allowable?

Different lenders have different criteria, and they often tie the size of a CCJ to its age when making a decision. For example, a lender might ignore all CCJs over two years old, and accept two CCJs within the previous two years – provided the value is no more than £1,000 in the past year, and no more than £2,500 in the year before.

Generally speaking, the bigger the deposit you can put down, the less stringent they are likely to be.

– Does having a CCJ reduce the amount I can borrow?

Yes, it potentially can, depending on a number of conditions. As a general rule, the older the CCJ, the less impact it will have. One CCJ for a relatively small sum will likely have a lesser impact than one for a large sum, and having a number of CCJs will possibly be a bigger issue than having just the one.

The key figure for lenders is the loan-to-value ratio; the bigger the deposit you can put down or the greater equity you have, the better your chances of getting a mortgage.

– I have paid my CCJ off, why doesn’t it show as satisfied on my report?

When you pay off a debt, the creditor (or their agent) should both send you a letter confirming the debt is cleared and also notify the court, so the public record can be updated.

This won’t happen instantly, unfortunately; things take a little while to go through the system. Once the debt has been cleared, leave it a few weeks then request copies of your credit report from the main UK credit agencies – Experian, Callcredit and Equifax.

If the CCJ still isn’t showing as ‘satisfied’, you’ll need to take action. In the first instance, contact the court for advice (have the details of the judgment handy). For a small fee they can provide a certificate of satisfaction which you can show to a prospective lender while you sort out your credit report details.

Incidentally, you should make sure you have proof of payments made to your creditor so if they don’t tell the court you’ve paid, you can prove you have cleared the debt. If you paid by standing order, then bank statements should do the job.

– What happens if I ignore a CCJ?

If you ignore a CCJ, it may affect your credit rating for up to six years, and failure to pay can also lead to enforcements such as bailiff visits or even a charge against your property.

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