Can I get a mortgage with a CCJ?
If you have a County Court Judgement (CCJ) on your credit file you may be wondering if it is still possible to get a mortgage.
In this article we hope to give you a better understanding of what lenders look at in terms of your CCJ and the eligibility of applicants with CCJs.
The chance of getting a mortgage with a CCJ are a lot greater than you may think. There are more lenders within the adverse credit mortgage market than there have been in a number of years.
However, it doesn’t mean you can go to a high street bank and they will approve you instantly. It means you need specialist advice and preparation in order to give you the best chance at being approved for a mortgage. You must also bear in mind that there are number of other factors that could affect your application.
How do I get a mortgage with a CCJ?
It is important to remember that there are so many variables that lenders take into account when they look at a mortgage application. All lenders have different criteria so it is vital you find the lender best matched to your circumstances.
There are a number of things that can affect your application but if you have a CCJ, assessments are typically made with the following in mind:
- CCJ amount
- Registered date of the CCJ
- Whether your CCJ has been satisfied
- How many CCJs are on your credit file
- How much deposit you have
- Type of mortgage you are applying for
- Any other credit issues on your report
Seeking the advice of specialist mortgage advisors who have access to whole market brokerage can help you find lenders who specialise in adverse credit mortgages and match you to the most suitable ones based on your circumstances.
What are lenders looking for in an application for a mortgage with a CCJ?
There are various criteria that lenders follow when assessing an application with a CCJ. On top of this they will also assess your income and affordability.
It is therefore important to make sure you fully understand what you will be assessed on before you consider applying.
Registered Date of the CCJ
This is the first and most important assessment a lender will make on your application. If your CCJ was registered more recently it will have a bigger impact on what the lender is willing to offer than if it was registered over two years ago.
This will be the second most important assessment lenders will make after considering the date your CCJ was registered. This is important because most lenders will limit how much they will allow depending on how recent the CCJ was.
For example if your CCJ was less than 12 months old a lender may have a £1,000 maximum. Whereas if it was two years old it may be limited to £2,500 and the maximum loan to value you could have would be 85%.
Generally anything more than three years old would not hold any relevance so a limit would not be placed.
As the loan to value you would be allowed can be lower than for a straightforward application, lenders will usually require a larger deposit.
How Much Deposit you have
Even in the simplest cases a higher deposit is more favourable to lenders as there is less risk. It’s no different if you have a CCJ.
However, some lenders may stipulate that if your deposit is 5% your CCJ will more than likely need to be over three years old. Whereas, if your CCJ was registered within the last year lenders may stipulate a 25% deposit as a minimum.
Has your CCJ been satisfied?
As we’ve said, most lenders have their own specific criteria. Some lenders will require your CCJ to be satisfied before approving a mortgage whereas other don’t.
If you haven’t satisfied your CCJ may need to have been registered over two years prior to application.
If you have satisfied your CCJ or are planning to do so, depending on the lender, a satisfied CCJ will either need to be repaid before you apply or at least 12 months prior to application.
Whilst it isn’t always necessary to satisfy your CCJ, if you have satisfied it then you will have a wider pool of lenders available to you.
Number of CCJs
The number of CCJs registered to you can further impact your application.
Some lenders will have a cap on the number of CCJs they will lend to. For example, a lender may limit the number of issues registered in the last 2 years to 2.
In other cases, lenders will consider a larger number of judgements as long as they were registered over 12 months ago and you have a deposit over 25%.
Obtaining a copy of your credit file is therefore highly advised so you can see exact details of your CCJs such as dates, amounts and numbers.
Other credit issues
As you might assume, further credit issues will make it increasingly difficult for you to get a mortgage.
Lesser issues are usually late or missed monthly payments, depending on how long ago it was and the length of extension.
However, lenders may still consider an application with a CCJ even if you have other issues such as bankruptcy, IVA’s and debt management plans.
Type of mortgage
The type of mortgage product you are applying for can also impact on criteria restrictions and the likelihood of being accepted.
The more flexible and straight forward scenario is if you already own a property and are moving or re-mortgaging.
If you’re a first time buyer there may be additional restrictions and criteria. Some lenders may not accept you if your CCJs are over £1,000, have not been satisfied 12 months prior to application or you do not have 6 months of satisfactory rental references.
Buy to let property mortgages can be one of the more restrictive. You may need a larger deposit, be required to satisfy your CCJ prior to applying or wait until the date of registration is more than 2 years.
How much can I borrow?
Having taken into account all of the above, a lender will only then be able to confirm the maximum loan to value they will offer.
If you have a CCJ you may be restricted to 4x your annual income. If they are over two years old though, you may be able to obtain 5x your annual income.
Further restrictions may be placed in terms of income, such as not being in your job for 12 months or being on maternity leave. If you’re self employed you may need 2 years of accounts or 12 months trading history.
These are just approximate guides. Every lender is different and it will depend on your individual circumstances.
Specialist advisors are paramount in helping you find the right lender for your circumstances as they have access to whole market brokerage. They also give you the best chance of getting an adverse credit mortgage approved first time round.
Contact us at Online Mortgage Guru on 0345 3669799 or email us via firstname.lastname@example.org and we will put you in touch with a suitable specialist to handle your enquiry.