Getting a mortgage with a CCJ
One of the most detrimental things you can have linked to your name or credit status is a County Court Judgment, or CCJ. It can affect your chances of getting a credit card, opening a bank account, or finding a mortgage.
You do have to wait for bad credit marks to be removed from your credit file before applying for a mortgage. With the right expertise and guidance, it’s possible for you to get a mortgage sooner than you might have expected.
Mortgage with a CCJ topics
What is a CCJ?
A County Court Judgment (CCJ) is a court order made in England, Wales, or Northern Ireland that is registered against you if you fail to make your agreed repayments. CCJs can be issued against both individuals and companies.
By the time you get to this stage, you will have been contacted by the creditor attempting to issue the CCJ. 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 get in touch to plan to pay it, legal action will begin. The letter will outline steps you can take to stop proceedings from going ahead.
After you have been contacted about a CCJ, you should respond to either pay the debt or dispute it. You can explain your financial circumstances, which will be considered when a judgment is made. If you are in financial difficulties, the court may allow you to pay off the debt in instalments.
If you take no action, you will receive a County Court Claim Form.
If you do not respond to this, you might be ordered to pay the amount in full, immediately. 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.
If you pay the debt in full (including any interest and court fees) you won’t have a CCJ recorded against you. If you do not pay, or plan to pay in instalments, it will be entered on the Register of Judgments, Orders and Fines. It will also show on your credit record.
Records of judgments remain on the Register of Judgments, Orders and Fines and on your credit report for six years.
If you pay the debt in full (including any interest and court fees) within one month of receiving the judgment, you will not 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 any companies checking your credit score will know you have paid.
Most people will receive written communication from the courts outlining the details of a CCJ, but if you are not sure, or you cannot remember how long ago it happened, you can search the Register of Judgments, Orders and Fines. You’ll have to pay a small fee – each search costs between £6 and £10.
You can also request a copy of the information held about you from credit reference agencies.
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:
- 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.
- 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.
- 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.|
- 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.|
It is possible to get a mortgage when you have one or more CCJs on your credit file. However, the following will impact a lender’s decision:
- How recently the CCJ was registered. The older a CCJ is, the better. If you have a recent CCJ, having a good-sized deposit can help secure a mortgage.
- The number of CCJs. 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. A bigger deposit may make them more flexible, provided the CCJs are over twelve months old.
- 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. If you have larger value CCJs, you should expect to have to accept a lower LTV (around 65% to 75%).
Some other factors to keep in mind:
- If the CCJ was registered within the last twelve months, it should be a maximum of £1,000 for you to be considered for an 85% LTV mortgage.
- If the CCJ was registered within the last twelve to twenty-four months, it should be a maximum of £2,500 for you to be considered for an 85% LTV mortgage.
- If the CCJ is more than two years old, the amount will have little effect. If it is more recent, the value will have an impact on any possible loan offer.
- If your CCJ is ‘satisfied’ you will have a bigger pool of lenders to choose from.
When you pay off a debt, you should receive a letter confirming the debt is cleared and the creditor will notify the court, so the public record can be updated.
This won’t happen instantly; it may take up to a few weeks. If the CCJ still isn’t showing as ‘satisfied’ after this time, 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.
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, use bank statements.
If you have a CCJ against your name, try not to worry. Not only can we canvass the market to help you find the right deal on a bad credit mortgage with a CCJ, but there are steps you can take to improve your credit rating.
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).
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.
Can I get a mortgage with 2 or more CCJs
Yes, it is possible for some to get a mortgage with more than one CCJ. The greater number you have combined with the amounts will be a contributing factor and when they were registered.
Can I get a mortgage with a satisfied CCJ?
Approaching a lender for a mortgage having satisfied your CCJ can stand you in better stead for being accepted however, it is not simply a case that a lender will approve you based on the CCJ now being settled. The fact that it was registered in the first place is still something the lender will factor in. If you have not settled the CCJ yet and are considering repaying it to help with a mortgage, it is best to check first what impact this may have. You may even be better holding the funds back as an additional amount of deposit or to reduce an existing mortgage amount.
Where can I get CCJ mortgage advice?
If you’ve found out your have one or more CCJs on your credit file, and you may also have been declined by a lender already for your mortgage, you’ll likely be looking for someone who can give you CCJ mortgage advice. Typically a mortgage broker such as ourselves who regularly deal with these types of mortgages are best placed to provide this advice. Our specially trained and qualified CCJ mortgage brokers are on hand to help you, so contact us today for your free advice.