If you have a CCJ, you may think that applying for a mortgage is a no-go, and although we won’t deny it is more challenging than those without one, we are here to tell you that it is more feasible than you think.
Over the years, there has been an increase in the number of lenders offering credit to those with adverse financial history, even those that specialise in it. So, let’s take a look at how it is possible to get a mortgage with a previous CCJ.
The Definition of a CCJ (County Court Judgement).
A County Court Judgement is an order stating that you owe money to someone which can occur for several reasons, including failing to pay an invoice or bill, falling behind with utility bills or mortgage payments, ignoring letters or phone calls from the person you’re indebted to, failing to stick to an agreed repayment plan or missing credit card and other debt repayments.
There are ultimately 2 types of CCJ, satisfied and unsatisfied. A satisfied CCJ has been paid and resolved and is the more positively viewed of the 2. It’s also worth noting that the CCJ will not be recorded against you if you pay the debt in full including interest and court fees within 1 month of receiving the judgement. An unsatisfied CCJ is the opposite, where the money has not been settled and remains to be resolved. If the CCJ was issued more than 2 years ago it can still be possible to secure a mortgage, however, if it is more recent then obtaining a mortgage can be tricky.
How Long Does a CCJ Stay on Your Credit File?
CCJs remain on your credit file for 6 years, whether satisfied or not. After these 6 years, it will disappear from your credit report and more mortgage lenders will become open to you, making obtaining a mortgage a little less challenging.
How Does Having a CCJ Affect an Individual’s Ability to Obtain a Mortgage?
Having a CCJ on your credit file will affect your credit score, which the score lenders base their judgement on whether you are responsible enough to loan money to. Your credit is comprised of various factors including missed payments and being registered on the electoral roll. The higher your credit score the more lenders are open to you, the lower your credit score, the higher your chances of being refused credit for a mortgage.
Some lenders will look at how many CCJs you have and assess whether it is a one-off or if you have multiple CCJs they may perceive you as a higher risk. Other lenders may require a higher deposit of around 25% or more to reduce their risk, others may state they need the CCJ to be at least a year old. Some lenders also set a “CCJ cap” where they will only consider someone with under a certain amount of CCJs. Reviewing your credit history before the application is highly recommended to reduce your chance of application denial.
Can you get a CCJ Removed from your Credit File?
Even if you’re able to repay your CCJ sooner, it will still show on your credit file for 6 years, however, ways you can get them removed more quickly are; by paying the CCJ in full within 30 days of issue or successfully disputing the CCJ and gaining court agreement.
Is it Possible to Get a Mortgage with a CCJ?
It is possible to get a mortgage with a CCJ and as mentioned previously, there are certain criteria lenders will have to consider you for mortgage approval. The amount of time passed since it was issued, the number of CCJs you have, and whether or not your CCJ has been settled can all affect mortgage application approval. Having a paid CCJ is far more favourable to lenders than an unpaid one as it shows your capability to meet your financial obligations.
The type of mortgage you’re applying for will also be impacted by your CCJ, some types of mortgages may be easier to apply for than others, including:
- Shared Ownership Mortgage – these are available to those with a CCJ and require a lower deposit due to only taking the loan for a portion of the property’s value. If approved, you should be able to purchase between 25% and 75% of the property and only pay a mortgage on this part. The rest will be owned by a housing association requiring rent to be paid to them for the portion that they own.
- Guarantor Mortgage - unfortunately, guarantor mortgages aren’t available anymore, but they used to be a way of securing finance with a CCJ using a guarantor who agrees to cover your mortgage payments if you can't make them. Speaking to a specialist bad credit mortgage broker can help with other options that are now available.
- Joint Mortgage - it is still possible to apply for a joint mortgage with another person if you have a CCJ, it is important to bear in mind that your CCJ will affect the overall outcome of what you can borrow together.
Applying for a Mortgage with a CCJ
A CCJ negatively impacts your creditworthiness, making it harder to secure a mortgage and, when applying, lenders will check your credit history to assess their risk of lending to you. This is where the challenge comes in if you have a CCJ, taking the steps to improve your chances and proving your reliability. You can:
- Build a positive credit history by making consistent and timely payments.
- Save for a larger deposit.
- Demonstrate stable employment and income with 3 to 6 months’ worth of payslips and bank statements.
- Seek specialist advice from a bad credit mortgage broker in Manchester like Taylormade.
Consider a Specialist Mortgage Advisor in Manchester to Help with the Strictest of Confidence
Getting a mortgage with a CCJ is more difficult than getting one without but it is still possible with some hard work and sensible financial decisions. The added benefit of expert knowledge, advice, and guidance from a specialist
mortgage broker in Manchester can also heighten your chances of getting approved.
Taylormade are
Manchester’s leading mortgage broker, providing personalised mortgage solutions to meet your requirements and while a CCJ provides challenges, our bad credit mortgage broker team at
Taylormade can help you on your way to homeownership.
If you are struggling to navigate your CCJ and obtain a mortgage, come, and chat with the leading
mortgage advisor in Manchester to see what possibilities could be available to you.
