A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
In the realm of mortgage financing, individuals grappling with County Court Judgements (CCJ) confront distinctive challenges and considerations. CCJ mortgages present a bespoke solution for those who have encountered financial setbacks resulting in legal Judgement.
In this particular case, we shall delve into particulars regarding CCJs, encompassing insights on securing a mortgage despite such circumstances, and beyond.
What Is a County Court Judgement (CCJ)?
CCJ stands for County Court Judgement. In the UK, a CCJ is a legal decision issued by a county court against an individual or business that has failed to repay money owed.
It is a court order indicating that the debtor is required to repay the specified amount to the creditor. The presence of a CCJ on an individual’s credit record can impact their creditworthiness and ability to secure loans or mortgages.
How to Get Mortgage With County Court Judgement (CCJ)
Securing a mortgage in the UK with a County Court Judgement (CCJ) can pose a challenge, yet it remains within the realm of possibility. Herein, contemplate a set of steps you may wish to consider:
1. Check Your Credit Report
Obtain a copy of your credit report from agencies such as Experian, Equifax, or TransUnion. Ensure the information is accurate, and if any errors are present, dispute them.
2. Settle the CCJ
If possible, aim to resolve the CCJ before applying for a mortgage. Lenders may view a satisfied CCJ more favourably than an outstanding one.
3. Build a Larger Deposit
Enhance your chances of securing a mortgage by saving for a larger deposit. A higher deposit means you’re borrowing less relative to the property value, presenting a lower risk to lenders.
4. Specialist Lenders
Some lenders specialise in providing mortgages to individuals with adverse credit histories. While these lenders may display a more flexible approach, anticipate the possibility of slightly elevated interest rates.
5. Seek Professional Advice
Consult with a mortgage expert that has experience in handling cases involving CCJ. They can offer advice tailored to your situation and may have access to lenders who exhibit more flexibility.
How Long Will a CCJ be Recorded on a Credit File?
A County Court Judgement (CCJ) typically lingers on your credit file for a span of six years. This timeframe commences from the Judgement date, regardless of whether the payment was settled in full or not. Post the six-year mark, the CCJ should automatically be expunged from your credit file.
It’s crucial to acknowledge that having a CCJ featured on your credit file can influence your creditworthiness throughout this duration. Lenders often perceive a CCJ as an adverse mark on your credit history, potentially impacting their decisions when evaluating your loan, credit card, or mortgage applications.
Should you settle the CCJ within one month of receiving the Judgement, you can seek to have it designated as “satisfied” on your credit file. This status may be viewed more favourably by lenders. However, it’s important to note that the CCJ will persist on your file for the entire six-year duration.
How Much Deposit is Required if You Have a CCJ?
The deposit necessary for a mortgage with a County Court Judgement (CCJ) can fluctuate based on several factors, encompassing the gravity of the CCJ, the lender’s policies, and your overall financial position.
In the UK, securing a mortgage can be more challenging with a CCJ, potentially prompting lenders to stipulate a larger deposit to counterbalance the perceived risk.
As a general rule, if you bear a CCJ on your record, the requirement for a higher deposit is a possibility compared to an individual with an unblemished credit history.
While those with good credit might typically provide a deposit ranging from 5-15% of the property’s value, individuals with a CCJ could be asked to furnish a more substantial deposit, conceivably falling within the bracket of 15-25% or even more.
How Do Mortgage Lenders Assess Applicants With CCJ?
When evaluating mortgage applications from individuals with County Court Judgement (CCJ), UK lenders typically take into account various factors to gauge the level of risk associated with the borrower. Here are some key aspects that mortgage lenders may assess:
1. Severity and Number of CCJ
Lenders will consider both the number of CCJ on your credit file and their severity. A single, minor CCJ may be appraised differently than multiple or more substantial ones.
2. Recency of CCJ
The timing of the CCJ matters significantly. An older CCJ might have less influence on your application, as lenders tend to focus more on recent financial conduct.
3. CCJ Satisfaction
Whether you’ve settled the CCJ (cleared the debt) can impact the lender’s decision. A resolved CCJ may be regarded more favourably than an unresolved one.
4. Credit Score and History
While the CCJ carries weight, lenders also take into account your comprehensive credit score and credit history. A superior credit score, even in the presence of a CCJ, could augment your prospects.
Clear Your CCJ Before Applying for a Mortgage!
Regularly reviewing your credit report is advisable to ensure accuracy. If any errors are identified, dispute them with the credit reference agencies. Taking measures to enhance your creditworthiness over time can also assist in mitigating the impact of a CCJ on your financial standing.
Carefully weigh your options before borrowing from creditors, especially if you are a business owner. In the future, you might encounter challenges in remortgaging with bad credit, therefore, it is essential to seek advice from a mortgage expert before applying for a mortgage.
Your Mortgage Expert has established itself as a trusted adviser on whom clients depend for all their mortgage and protection requirements. Whether you’re a first-time buyer, a seasoned homeowner, or a contractor with unique challenges, Your Mortgage Expert is here to guide you.
Can I get a CCJ mortgage with a satisfied judgement?
Yes, it is possible to secure a CCJ mortgage even if you have satisfied the judgement. Lenders may view a satisfied CCJ more favourably than an outstanding one.
How long does a CCJ stay on my credit file?
A CCJ typically remains on your credit file for six years from the date of the judgement, regardless of whether it's satisfied or not.
Will having a CCJ affect my chances of getting a mortgage?
Yes, having a CCJ can impact your mortgage eligibility. Lenders may perceive it as a negative mark on your credit history, affecting their decision.
Luca BertolinoMortgage Expert
Your Mortgage Experts is led by Luca Bertolino with 20 years experience in financial services and in the property market. Through Luca’s wealth of knowledge and expertise, Your Mortgage Experts have become a trusted adviser that clients have come to rely upon for all their mortgage and protection needs.