CCJ Mortgages: Getting a Mortgage With a CCJ
If you’ve struggled with debt in the past and are now looking to buy a property, you might 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 30 days, 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.
Will a CCJ affect my mortgage application?
Yes, a CCJ can negatively affect your mortgage application. Most lenders will carry out a more detailed assessment to evaluate your ability to repay the loan. This might include requesting additional bank statements to better understand your income, or offering you higher interest rates and asking for a larger deposit to reduce the risk of lending to you.
How do I know if I have a CCJ?
You’ll typically be informed of a County Court Judgment (CCJ) through a letter sent directly from the court. This notice will include details such as the amount owed, who the payment should be made to, and the deadline or schedule for repayment.
If you're unsure whether a CCJ is still recorded against you, there are two main ways to check. You can either search the Register of Judgments, Orders and Fines to see if one has been issued in your name. Or, you can download your credit report through a free credit check (free for 30 days, then £14.99 a month - cancel online any time). This will give you a clearer view of your financial status and help you identify any action that may be needed.
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. 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? The more recent your CCJ, the greater its impact on your chances of securing a mortgage. If it occurred over three 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.
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 of the judgement date, the CCJ will not appear on your credit history, though defaults or actions leading to it might. If the debt wasn’t repaid within 30 days, then fewer lenders may accept your application.
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.
What is the amount of the CCJ? A high-value judgment can raise concerns about your financial stability and affect your loan-to-value (LTV) ratio, reducing your chances of approval. In contrast, a smaller, settled CCJ (e.g. under £1,000) is often seen as less of a risk.
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.
How much have you saved for your deposit? Mortgage lenders might 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.
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 example, 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 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 is 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 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 might make it easier to secure a mortgage if the rest of your credit report is clean.
What if the CCJ was issued in error?
A CCJ that was wrongly issued, for instance, if you were unaware of the claim because you’d changed address, doesn’t have to remain on your record. You can request the court to remove, or set aside, the judgment by submitting Form N244.
This requires attending a hearing and presenting evidence either that the claim wasn’t received or that you had a legitimate defence. If the court agrees, the CCJ will be struck from your credit file entirely.
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.
The above blog has information contained within which was correct at the time of publication but is subject to change.
FAQs
Can mortgage lenders see a CCJ after 6 years?
No, once six years have passed from the date of the judgment, a CCJ is automatically removed from your credit file, even if it hasn’t been paid. This means mortgage lenders won’t be able to see it, as they only assess the previous six years of your credit history.
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 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 might 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.