Can you get a mortgage with a CCJ?

Trying to get a mortgage with a less than perfect credit history could feel like a  challenge. If you’ve not been able to pay off debts in the past, you may find yourself with a CCJ on your record. You might not have initially known what it was, and now it feels like it’s stopping you from buying a house.

We’ve written this blog to answer all of your questions about CCJs, and what you can do to get a mortgage if you have one.

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What is a County Court Judgement (CCJ)?

A County Court Judgement (CCJ) is a court order that’s been filed against you if you haven’t  paid back money you owe. For example, if you’re behind on your rent, your landlord may file your debt with the local county court, and they could issue you with a CCJ.

CCJs can stay on your record for up to 6 years, even if you pay it off e in that time. They can seem like amark on your credit record and can make it tricky if you’re trying to get a mortgage.

If you’ve been having trouble getting approved for credit or you’ve seen a big drop in your credit score, it’s possible you’ve been issued a CCJ you don’t know about. Sometimes this happens if you’ve moved recently and haven’t updated your address with someone you owe money to. If you think you might have a CCJ, you can pay £4 to check the Register of Judgements, Orders and Fines for a CCJ against your name.

Can I get a mortgage with a CCJ?

It’s certainly possible to get a mortgage with a CCJ. CCJs tell a mortgage provider that you may be  a riskier investment than someone without one  but, if the CCJ was a one-off lapse, you may be able to do things to  counteract its potentially negative impact  on getting a mortgage.

These are a few of the effects that a CCJ could have on your mortgage application:

• You might have to put some work in to rebuild your credit score
• You might find you will have to pay a higher interest rate on any mortgages you get approved on
• You might have to wait up to 3 years after your CCJ was issued before you can apply for a mortgage (some mortgage providers might only make you wait a year)
• You might have to put down a larger deposit on your mortgage

There isn’t necessarily a definite set of rules about how much of an effect a CCJ could have on a mortgage application. Here are a few things to take into account that might affect the impact of an CCJ:

Date of the CCJ

The date the CCJ was registered tends to be the first thing a mortgage provider -will look at. -. Some mortgage providers can be fairly sympathetic to satisfied CCJs that are over a year old (we’ll get to what satisfied means shortly), and after 3 years, you’re fairly likely to have some decent options. Though you may have to shop around a bit for a mortgage provider that matches your needs.

Size of the CCJ

The size of the CCJ tends to be the next thing a mortgage provider will look at. What is seen as an “acceptable” size is likely to be relative to how long ago the CCJ was registered. This can really vary depending on each mortgage provider’s policy. Some mortgage providers will only give you a mortgage if your CCJ was less than £3,000 in the last 3 years, whereas others may only consider a CCJ if it was less than £1,000 and was over a year ago. Again, it can be worth looking around to find an option that works best for your situation.

Satisfied or unsatisfied

Whether a CCJ is satisfied or unsatisfied essentially means whether or not you have paid off your debt yet. Satisfying your CCJ is likely to stand you in the best place, as some mortgage providers will simply reject any mortgage applications with an unsatisfied CCJ. Other mortgage providers may just extend all of their boundaries by a year or two for unsatisfied CCJs.

Number of CCJs

The number of CCJs you have can also affect your mortgage applications. A mortgage provider that’s ok with you having a CCJ will usually allow only one or two on your record before they start really questioning your ability to pay your debts. If you have more than two CCJs, there will probably still be options for you out there, but you may find you have to pay a much higher deposit or have a higher interest rate on your mortgage.

How do I get a mortgage with a CCJ?

All of the factors we’ve listed above can play into each other, so if you have multiple CCJs, all in the last 2 years, totalling over £3,000, you may find it more difficult to get a mortgage.

Some things you can do to boost your application are:

• Improve your credit score - credit score can be an indicator for a mortgage provider of how good you might be at paying back loans and staying on top of your finances. Making sure you make all of your debt payments (e.g. credit cards or other loans) in full and on time can help to rebuild your credit score after a CCJ.
• Saving up for a big deposit - A big deposit can go a long way with a mortgage provider to calm any worries they have about getting their money back. The bigger deposit, the less money you’re actually borrowing.
• Satisfying your CCJ - Paying off a CCJ as soon as possible can really help to show that you’ll pay your mortgage on time, and that the problem was just a one-off. If you can pay off a CCJ within 30 days of it being issued, you can usually get it removed from your record straight away without having to wait 6 years.
• Talking to a broker - Brokers can be a great way to find mortgage providers that are more sympathetic to your situation. It’s worth noting that it may end up costing you more in fees and increased interest rates, but could also be a the right solution for your situation. If you think you might need to shop around for a good deal, a broker may be able to help you do that.

A few final tips…

So, getting a mortgage with a CCJ is certainly possible, it just might take you a bit longer to get there. Here are a last few things to keep in mind:

• Trying to get a mortgage with a very recent CCJ may be hard, unless you were able to pay it off within 30 days and remove it from your record
• Paying off any CCJs as soon as you can and clearing up your credit record can really help with moving forward with an application
• You may find you have to put down a bigger deposit or pay a higher interest rate if your CCJs were over £3000

Urban Jungle is not a financial advisor and information in this article should not be taken as advice or recommendation.