Applying for a Mortgage with a Recent CCJ

What is a Country Court Judgement (CCJ)?​

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A County Court Judgement is a court order served to you when you do not repay a credit commitment. This is usually a last resort for a creditor and is served after a long period and multiple notices.

 

Lenders take CCJs into consideration when assessing your mortgage application as it influences their risk calculation. Occasionally, it may be possible to remove these from your credit file if it was registered by mistake or unfairly. 

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Can you get a mortgage with a CCJ on your credit file?

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It certainly makes it harder to get a mortgage with a CCJ as the number of lenders available is restricted, however it shouldn’t stop you. Many lenders specialise in mortgages for people with CCJs, although the interest rate being offered is higher.

 

Each lender has a different policy regarding CCJs and separate product tiers depending on the severity of the CCJs. For some lenders, they have products that will accept a CCJ within 3 months of the mortgage application. 

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Why did you get a CCJ?

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The reason why you got a CCJ is important. Often lenders are more lenient when CCJs were registered due to utility bills, mobile phone bills or parking fines. Also, if there is understandable reason why the CCJ was not your fault. For instance, we have helped clients who had a CCJ registered against them because a tenant in their buy to let property did pay for the electricity bill, and this was unfairly registered against the owner.

 

If the CCJ was the result of a default on a credit card or personal loan, lenders will still consider this. 

 

How much was it registered for?

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There is no limit to the value of the CCJ, however some lenders have a maximum amount. For instance, certain lenders have a maximum amount of £10,000 in the last six years, or £2,000 within the last two years. Obviously, the lower the amount, the easier it is to find a lender.

 

In theory, there is no maximum limit, however, with a CCJ over £10,000, the rate being offered will be significantly higher. Additionally, some lenders will just ignore CCJs under £300.  

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How recent was it registered?

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The most important factor when determining your mortgage options is the date of registration. If it is over six years ago, the majority of lenders will consider your mortgage application. If it is within the last two years, it will make it much harder to find a lender. Therefore, if the CCJ was registered recently, it is crucial to seek expert advice. 

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Did you clear the balance?

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It will make a difference if the CCJ is satisfied or unsatisfied. Some lenders will not consider you if you have an unsatisfied CCJ, while others will. It is always a great idea to satisfy these as it will often end up saving you money with a lower interest rate. Importantly, you should seek advice from the experts as very few lenders will consider this.  

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A bigger deposit may be required​

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The maximum loan to value (LTV) is 95% across the mortgage market, therefore, with just a 5% deposit you can buy your dream home. However, if you have a CCJ, many lenders will see you as a more risky investment. As result, they may cap the LTV to 90%, 85% or even 80%.

 

With a small deposit, it may not be possible to get a mortgage with a CCJ, or significantly more expensive. We would always recommend you save a deposit of 15% to get a better rate, but we can still look for options with a lower deposit.  

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CCJ registered against your business?​

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If a CCJ is registered against your business, it is likely a lender will find this when they do a Companies House search. This is because, if you are a director of a limited company, you will be listed on companies house, which is normally a check as part of their due diligence. This is especially important if you plan to use the income in your mortgage application.

 

It is best to seek specialist advice if you have a CCJ registered against your company.