CCJ mortgages: Can You Get a Mortgage with a CCJ?
If you’ve struggled with debt in the past and are now looking to buy a property, you may be wondering, “Can I get a mortgage with a CCJ?”.
At The Mortgage Genie, we can help you secure a mortgage with a CCJ. With access to over 90 lenders, many specialising in cases like yours, we’ll consider all relevant factors to find a bad credit mortgage that fits your needs and budget. Contact our team today to discuss your situation.
We know you may have more questions about CCJ mortgages, so we’ve put together this guide to address them. We’ll cover:
Read on to learn everything you’ll need to know ahead of applying for a mortgage with a CCJ.
What is a CCJ?
A CCJ, or county court judgment, may be issued if someone has taken legal action against you, claiming that you owe them money. Receiving a CCJ means the court has ruled that you are indeed liable for the amount in question.
If you fail to pay the full amount within a month, the judgment will be recorded and remain on your record for six years. This can make it more difficult to obtain credit, which is why a CCJ can be a significant concern if you're planning to apply for a mortgage.
Can you get a mortgage with a CCJ?
Yes, it's possible to get a mortgage with a CCJ, although it’s more difficult than with a clean credit report. A specialist mortgage broker, such as those at The Mortgage Genie, can help you understand your options and find the best deal.
Several factors will influence whether a lender will accept your application and which mortgage products are available to you. Let’s explore the key details a lender will consider when applying for a mortgage with a CCJ:
How recent is your CCJ? Naturally, the more recent your CCJ, the greater its impact on your chances of securing a mortgage. For example, if it occurred years ago and you’ve had no financial issues since, a lender will typically be more lenient than if the CCJ was within the last 12 months.
Are there multiple CCJs on your credit file? If you have just one CCJ, lenders may view it as a blip in an otherwise acceptable credit history. However, multiple CCJs suggest a pattern of financial mismanagement, and most lenders won’t approve a loan if you’ve had more than two in the last few years.
Has your CCJ been satisfied? Whether you've repaid your CCJ and when it was settled can affect a mortgage provider’s decision. If the debt was paid within 30 days, the CCJ may not appear on your credit history, though defaults or actions leading to it might, unless the claim was disputed. If the debt wasn’t repaid within 30 days, getting a mortgage is still possible, but fewer lenders may accept your application. CCJs rarely occur in isolation, so consider any other credit issues that could impact your chances. If your CCJ is satisfied, you have a steady income, and no serious credit issues remain, you should be able to secure a mortgage.
How much have you saved for your deposit? Mortgage lenders may hesitate to accept your application with a CCJ due to the perceived risk, as they’re concerned about your ability to repay a large loan. By saving a larger house deposit to reduce the amount you need to borrow, you can improve your chances of securing the loan.
Have you had other credit issues? While a lender may overlook a CCJ - especially if satisfied - they might be deterred by other credit issues, such as missed payments or bankruptcy. If additional financial struggles have impacted your credit rating, it’s worth consulting a CCJ mortgage broker to explore an adverse credit mortgage tailored to your circumstances.
Ultimately, factors like how recent your CCJ is, how many you've had, and any other credit issues may mean you’re in a better position than you think. It’s not impossible to get a mortgage with a CCJ - as long as you’ve kept your record clean and consult a specialist broker, you should be able to find a loan that suits your needs.
In the lead-up to applying for a mortgage, it’s a good idea to keep an eye on your credit rating so you can spot any potential issues and take steps to improve your score if necessary. A free credit check (free for 30 days, then £14.99 a month - cancel online any time) will help you understand your position so you can determine whether there’s any work you need to do in this area.
Will a CCJ affect my mortgage application?
Having a CCJ can negatively impact your mortgage application, as most lenders will conduct a more thorough assessment to determine whether you can afford the repayments. For instance, they may request additional bank statements to better understand your income, or they may require a larger deposit to reduce the risk of lending to you.
While applying for a mortgage with a CCJ can be slightly more complex, it is certainly possible. Your mortgage broker will guide you through the process, helping to maximise your chances of approval.
How much can you borrow for a mortgage with a CCJ?
Lenders usually calculate how much you can borrow based on a multiple of your annual income, often around 4x your salary. For instance, if you earn £30,000 a year, you could potentially borrow up to £120,000.
That said, if you have a CCJ, then some lenders may impose a cap on your loan-to-value (LTV) ratio, which could limit the amount they’re willing to lend.
How to get a mortgage with a CCJ
Even with a CCJ on your credit file, you can still buy a property with some planning and expert guidance.
First, keep your credit report clean after the CCJ by making timely payments and avoiding new credit applications. Lenders may be wary if they see recent credit checks, as it could suggest you're seeking more loans or cards, which might lead to a rejection.
It's also vital to consult a mortgage broker, preferably one experienced in adverse credit. They’ll help assess your situation, find suitable products, and guide you through the application process, increasing your chances of securing an affordable deal.
How long does a CCJ stay on your credit file?
Like most credit issues, a CCJ will remain on your credit file for six years from the date it was issued. After this period, it will be automatically removed.
It's important to note that even if you pay off your CCJ in full within six months, it will still appear on your credit report, and mortgage lenders will be able to see it.
Can you remove a CCJ from your credit file?
In certain circumstances, you may be able to remove a CCJ from your credit file, preventing it from affecting your mortgage application.
If you pay the CCJ in full within 30 days, you can apply to have it removed from both the public register and your credit file by requesting a certificate of cancellation from the county court. You’ll need to complete court form N443 and provide proof of payment.
If you pay the CCJ after 30 days, it remains on your record for six years. However, you can apply for a certificate of satisfaction, which shows the CCJ has been settled. While the CCJ will still appear, lenders will see it as satisfied, which may make it easier to secure a mortgage if the rest of your credit report is clean.
How long after a CCJ can I get a mortgage?
The time you’ll need to wait for a mortgage after a CCJ depends on factors like your credit report and deposit size. There’s no one-size-fits-all answer, so it’s important to consult a mortgage broker for personalised advice.
Generally, if your credit report is clean and you’ve saved a 5% deposit, your CCJ will likely need to be at least three years old for mortgage approval. However, with a 25% deposit, many lenders may accept a CCJ even if it’s less than 12 months old. The larger your deposit, the more flexibility you’ll have.
Since lenders have different policies, speaking with an expert mortgage advisor will help you understand your options.
Being served with a CCJ can be particularly stressful if you have plans to buy a property, but you can still achieve your goal. Here at The Mortgage Genie, we have a team of expert brokers who have a lot of experience with helping both first-time buyers and seasoned house owners buy properties when their credit ratings aren’t the best.
So, if you would like our help with finding the best mortgage deals to suit your situation and budget, get in touch with us today. We would love to help you on your journey towards purchasing the property of your dreams.
FAQs
Can you remortgage with a CCJ?
If your initial mortgage deal has ended or you're considering releasing equity, you may wonder if a CCJ will impact your remortgage options.
It’s possible to remortgage after a CCJ, but it may not always be the best choice. Your new mortgage will be based on your current credit report, and if your rating has dropped, you might only qualify for less affordable deals with higher interest rates.
If you’re considering remortgaging with a CCJ, it’s wise to consult a mortgage advisor. They can help you assess your options and determine whether it’s better to wait a few years, or even the full six years, until the CCJ is removed from your record.
Can you get a buy-to-let mortgage with a CCJ?
A CCJ can impact your buy-to-let mortgage application, much like it would for a standard home purchase. Approval depends on factors like the age and value of the CCJ, as well as your credit history since then. You’ll also need to demonstrate you earn enough to cover both your current outgoings and the new mortgage repayments.
In short, yes, you can get a buy-to-let mortgage with a CCJ. While it may take more effort, an expert mortgage broker can help you find the best product and guide you through the process.
This information is a guide only and should not be relied on as a recommendation or advice that any particular mortgage is suitable for you. All mortgages are subject to the applicant(s) meeting the eligibility criteria of the specific lender. You should make an appointment to receive mortgage advice which will based on your needs and circumstances.