Are you trying to get a mortgage with a CCJ / County Court Judgement? It may feel as if you have a poor chance of getting a deal that you need to purchase a house. However, the chances of obtaining a mortgage with a CCJ are much higher than most people imagine. A County Court Judgement isn’t a black mark on your record that lasts forever.
Of course, walking into your bank’s local branch or applying online won’t guarantee results. Very few people are able to get an instant mortgage, even if their credit score is flawless. The key is finding the correct advice so that you can prepare yourself adequately. Once you’re ready and organised, getting a mortgage with a CCJ is likely.
So, how do you make a County Court Judgement less of an issue?
Factors That Affect A Mortgage Application
A CCJ does play a significant part in an application, but it isn’t the end of the world. Plus, it’s not the only factor that lenders analyse before accepting or rejecting a candidate. Here are the main features that impact mortgage applications:
- The amount of your CCJ
- The date the CCJ was registered
- A satisfied or unsatisfied CCJ
- How many CCJs you have on your credit report
- The size of your deposit
- The mortgage type (e.g. residential or buy to let)
- Other bad credit issues that show up on your report
You will encourage a lender to accept your mortgage application if you can satisfy these elements of your County Court Judgement. Continue reading to find out more about these issues. Alternatively, call us on 01892 251 500 or check out the website for instant, up to date advice.
The Amount Of A CCJ
A County Court Judgement is an official acknowledgement that you have failed to pay a debt in the past. As a result, the overdue balance plays a part in considering applicants for a mortgage. Not only does a CCJ indicate that you may not be a trustworthy, reliable customer, but the level of debt adds to the unlikelihood of keeping up with the payments.
Therefore, the best option is to try and reduce the figure to a payable amount. Not everyone has the money to pay off a significant chunk of debt, but you can always negotiate a payment plan. A plan will include affordable monthly rates that allow you to shave money from your arrears without requiring a large sum of money.
If you don’t, you may experience:
- Borrowing limits: if the amount of your CCJ was high, a lender might reduce how much they typically lend.
- A bigger deposit: a bigger deposit is necessary for some circumstances as banks use it as a safety net. For CCJs, you can expect to pay up to 30% of the property’s value.
- Rejected application: recent CCJs, in particular, may only be accepted if the amount is under £1,000.
The Date Of Your CCJ
Lenders and banks have straightforward views on CCJs – if they were registered a long time ago, they aren’t as problematic. However, if the opposite is true, they will view your mortgage application with suspicion. There is no timeframe to when a CCJ becomes insignificant, although it is wiped from your record after six years.
Of course, you may not want to wait seventy-two months before obtaining a loan. For those who don’t, it’s essential to lower the amount or show that it’s in the process of being set aside. ‘Default judgements’ are eligible to be set aside as long as you have evidence it was wrongfully administered or there was a reason you couldn’t defend it.
For the latter, it can be as basic as showing that the letter was delivered to the wrong address and you weren’t notified of your obligation to pay.
Has The Judgement Been Satisfied?
Individual lenders have different rules. So, there isn’t a one-size-fits-all-policy regarding satisfying a CCJ before applying for a mortgage. With that in mind, it’s essential to remember that some creditors may require you to finalise a County Court Judgement before moving forward.
Usually, the date of the CCJ is more important because:
- You can get a mortgage if a CCJ was registered over two years ago
- Other lenders will ask that you satisfy a CCJ at least one year before applying
- You can satisfy it before or during the process
The good news is that you can use our service to search for lenders that aren’t strict or rigid when it comes to your credit rating.
Number Of CCJs
It is possible to have more than one CCJ on your credit report and acquire a mortgage. But, there are caveats. For instance, multiple judgements often require the applicant to put down a deposit of 25% of more. Also, the date of the CCJs will come into play. Recent County Court Judgements (in the last year) will increase the size of your deposit as they will make you more of a risk.
Please keep in mind that some lenders put a cap of the number of CCJs allowed. Therefore, it’s imperative that you check your credit report before applying. Applying with multiple CCJs will impact your rating further, so double-checking your creditor details is smart. It’s free, too.
Experian, Equifax and TransUnion are the three biggest and most comprehensive credit services in the UK.
Reading the numbers linked with potential deposit amounts may send a shiver down your spine. Most people don’t have 25% of the house value, not when property prices are high due to a market bubble. Thankfully, a regular amount will secure a mortgage with a CCJ, but the judgement may have to be two years or older.
As a rule, the bigger your deposit, the more chance you have of obtaining a mortgage. And, that goes for people with a very recent County Court Judgement. This is because the size of your deposit makes you less a risk, so lenders are happier to loosen their purse strings. A quarter of the house value is seen as the magic number.
Anything over 25% will open up doors as lenders will see your application as less of a risk. An excellent option is the government’s Help to Buy scheme as they will match your deposit up to 20% with an equity loan.
Certain mortgages are harder to obtain than others. A buy-to-let mortgage is a prime example as it is one of the toughest to apply for with a CCJ. Even buying a new build or buying as a first-time-buyer will reduce the likelihood of being accepted if you have a County Court Judgement.
A fantastic tactic that is always at your disposal is comparing deals. At Think Plutus, we go the extra mile and search through 10,000+ mortgage products from 100+ lenders, many of which are not available to the general public. As a result, we’re best placed to find the most suitable deals, regardless of your requirements.
While a CCJ is a big deal, it isn’t the only problem that impacts a mortgage application. Everything from bankruptcy to late payments will show up on a credit report, which is why you may have to fulfill these issues first. Merely paying bills on time is enough to boost your credit rating and make you less of a gamble.
There are levels, and bankruptcy or repossession is severe. In these instances, you may have to consent to a guarantor in case you fall behind and can’t make the payments. Typically, parents are happy to agree if it gets you on the property ladder and prevents your mistakes from holding you back.
Please don’t assume that your past will stop you from getting a mortgage with a CCJ or any other credit issues. There are always mitigating circumstances, so a deal could be closer than you know.
Understanding A CCJ
Often, the process isn’t as straightforward as people think, which means you may have a backup option.
A pending CCJ doesn’t mean that the judgement will automatically go on your record. If you can pay it off before the scheduled court date, it will be erased and cease to exist. They are only registered once a court rules on the information.
Even when an official ruling is made, you still have a get-out-jail-free-card. Paying off the full amount within a month will prevent a CCJ from being registered on the Register of County Court Judgements. It’s well worth considering this option if you do have the money because a CCJ lasts for six years, otherwise.
Anybody unsure whether they have a CCJ, or whether one is registered in their name, can use TrustOnline.
At Think Plutus, we understand that you may not be able to pay off a CCJ. We also believe that past mistakes shouldn’t ruin your life. That’s why we specialise in helping people with bad credit get the mortgage they deserve.
When you need a mortgage but think a CCJ will get in the way, you should Think Plutus. Contact us now to safeguard your future.