Can You Get A Mortgage With A CCJ

Most people hoping to buy a home will need a mortgage. Unless you have a large sum of money available, the prospect of buying a home with cash is unlikely. Without rich relatives or a lottery win, most people will have to rely on a mortgage to help them buy their home.

A mortgage is a long-term loan used to buy a property. Once you buy a home with a mortgage, you are allowed to live in the house and make payments towards the mortgage every month. Most mortgages last around 25-30 years.

To make sure the mortgage is affordable, lenders will carry out stringent checks on borrowers. They will look into their past, present and future financial situation to determine if they are responsible with money and have a steady source of income.

During these checks, lenders are looking for signs that you might struggle to repay your debts, and one of the key signals they look for is the presence of CCJs. Getting a mortgage with a CCJ can be more difficult, but not impossible. In this guide, we will look at some of the factors you will need to know about before applying for a mortgage with a CCJ.

What is a CCJ?

A CCJ is also known as a County Court Judgement. Your creditors can apply to the courts to force you to repay your debts if you are in arrears. This is typically the last step, as it can incur additional charges for both parties. If you have a CCJ, it will impact your credit score. The credit report will show the amount you owe, who you owe the money to, the date it was decided in court, and if the debt has been repaid. A CCJ will stay on your credit report for 6 years.

Do I have to disclose it on my application?

You don’t have to, because it will appear on your credit report. All lenders will look at your credit report before making a lending decision, so there is no way to conceal this or try to hide it from the lender. Your application might include a question about CCJs and bankruptcy, so it’s important to be honest.

Some people aren’t aware they have a CCJ and this can cause problems when they submit their mortgage application. The most common reason for having a CCJ without your knowledge is from an old debt that is registered to a previous property. If you have missed the letters, you could end up with a CCJ without your knowledge.

This highlights the importance of checking your credit score before you move forward with an application. A CCJ can cause a significant drop in your credit score, so it’s worth checking if one is present before you begin an application. The presence of a CCJ can also influence the type of lender you approach, as some will be more forgiving of these red flags than others.

Will a CCJ stop me getting a mortgage?

No, not always, but it can if you approach the wrong lender. Some lenders will fail to see past this red flag, so there is little point in submitting an application. Others will look at other factors that are on your application and make a more considered assessment. This can include:

Whether the CCJ is satisfied. This means that the debt has been paid and your credit report has been updated accordingly.
The time since the CCJ. A CCJ will stay on your record for 6 years, so if it has been 5 years and the debt has been paid, this will be less likely to impact your credit score than an unpaid CCJ from the past 6 months.
The amount owed. A debt of £10,000 will look more severe than a £400 debt. The amount will be taken into consideration as a sign of your financial responsibility.

How can I minimise the risk of rejection?

No one likes to think about rejection, but it can be even more stressful when your dream home is on the line. If you have a CCJ and you are worried about it having an impact on your application, the best thing you can do is to be prepared.

By approaching the right lender, you can minimise the risk of rejection. Navigating the mortgage market alone can be stressful, which is why we recommend embarking on this journey with the help of a mortgage broker. They will be able to help you identify the lenders most likely to say yes.

You can also neaten up other areas of your application to minimise the CCJ. Pay down your existing debts and keep your spending within 20-30% of your credit limit. You can also close old accounts, make sure you’re on the electoral roll at your current address, and boost your deposit amount by as much as possible. You should also avoid any credit applications before you submit your mortgage paperwork, as this will appear on your report.

A lender might be able to overlook a CCJ if the other areas of your application look strong. This includes your deposit, current financial conduct and your income.

Should I wait for the CCJ to end?

If your CCJ is coming to an end, you could be better off waiting until it has dropped from your credit report to make it easier to secure a mortgage. While a CCJ might not prevent you from securing a mortgage, it can make your interest rates higher, which means your mortgage will cost most in the long term. This is a common tactic employed by lenders to manage their risk.

If your CCJ is more recent, focus on getting it paid off and marked as satisfied on your credit report. This will often restore your credit score and help you to get your lending back on track. You can then approach a specialist mortgage broker to discuss your next steps, and if this should include a mortgage application or a little more waiting.

Mortgage With Satisfied CCJ On File

A lender can decide to take legal action against a borrower if they consistently fail to pay back their debts. If you are taken to court and issued with a CCJ, you will need to pay back the debt in full, or a portion of the debt by agreement. This judgement will be recorded on your credit file for six years unless you pay back your debt before the CCJ is issued.

In the past, people with poor credit and CCJs could secure bad credit mortgage or remortgage. Since the credit crunch and reform of the mortgage industry, lenders have been forced to become more responsible. As a result, getting a mortgage with a satisfied CCJ on your file has become a little more difficult.

Many high street lenders will reject people with CCJs and defaults on their file as they view them as high-risk borrowers. Others may accept your application but will request a higher deposit or offer a higher interest rate. This can mean buying a house becomes much more expensive.

If you have a CCJ on your file and would like to secure a mortgage you have two options. You can either wait six years until the CCJ drops from your credit report and start building your credit again, or you can shop around. Your credit report is just one part of the whole picture that lenders will consider when making a decision.

There are steps you can take to make yourself a safer choice, including securing a bigger deposit of around 20-30%. The more deposit you can provide, the better. You can also shop around and try niche mortgage providers who may be more inclined to work with borrowers with poor credit histories.

Is there any way a mortgage provider could find out that I have a pending CCJ hearing?

A creditor can decide to take action against you if you are struggling to repay your debt to them. They will inform the courts that they plan to take legal action, and if upheld, the court will issue something known as a County Court Judgement. This is a legally binding order from the court to repay your debt or a smaller portion of your debt if it is unaffordable.

If you are able to repay the debt in full, the CCJ will not be issued and your credit score will not be affected. If you cannot repay the debt in the required time, you will be required to stick to a payment schedule. The CCJ will appear on your credit report for six years, even if you pay it back early.

For those with a pending mortgage application, this can lead to a difficult situation. If you are disputing the debt or if you plan to pay off the debt in full before a CCJ is issued, there is no reason a mortgage provider would know as it is not listed on your credit file. However, this can be risky. For example, if you are unable to repay the debt as planned, or if the dispute does not go your way, this could impact your mortgage application further down the line.

If you have secured a mortgage in principle, there may be more extensive checks further into the application process that could put the brakes on your mortgage. You may also be asked to sign documents which state that there are no pending hearings, and so you would be committing fraud to go ahead with the application before the CCJ is settled. The best thing to do is to wait until you know the outcome and then go forward with the mortgage application when your credit report is clear.

Can I Get a Mortgage with Defaults & CCJs?

If you have defaults or CCJs on your credit report, you might be wondering if you are able to get a mortgage. While some people might struggle to reconcile poor credit history with mortgage lending, it is possible to do. You might need to find a bigger deposit or put up with higher interest rates, but it is possible to get a mortgage following a CCJ or default. Read on to find out how to secure a mortgage with defaults and CCJs.

Get an accurate picture

The first step to securing a mortgage is to understand what you are working with. Sign up to all major credit reference agencies so that you can see how mortgage providers see you. You should create an account with Experian, Equifax and Statutory Credit Report. You will have a different credit score with each provider, but this can help you to understand your position.

Start by checking that everything is accurate. If you paid off the CCJ within the required timeframe, it should not be applied to your credit report, so you can request to have this removed. Some people wrongly assume they have a CCJ when their debt has been fully repaid.

Once you know what mortgage providers will see when they look at your credit report, you can begin to fix key issues.

Shop around for a provider

Some mortgage providers will reject individuals with CCJs immediately. Others will look at other factors and take a more considered approach. Each lender is different and you can’t assume that being rejected by one lender means that all lenders will reject you. Take the time to find a specialist lender that will work with you rather than against you.

Give it time

A CCJ or default can only stay on your credit report for six years. After this time, they will be removed and no trace will remain. If they aren’t removed in time, get in touch with your creditor to confirm your debts have been paid and you have completed any County Court Judgements.

If you can wait it out, then it will be much easier to get a mortgage with the CCJ or default removed from your file. This will give you access to a wider range of lenders and preferential interest rates. If you cannot wait, you might need to be more flexible with your choices.

Getting a mortgage with a CCJ or default

In many cases, getting a mortgage with a CCJ or default is difficult but not impossible (see here). You may be required to secure a larger deposit, which can seem impossible if you don’t have access to the funds. One way to increase your deposit amount without increasing your costs is to look for a cheaper property. You might have to compromise on some of the features you would prefer, or look for a property that needs a bit of DIY work, but it can help to get you on the property ladder.

The good news is that paying back your mortgage is a great way to build your credit score. This means that once the CCJ or default is removed from your credit report, you will already be well on your way to building your credit. This can then help you to secure loans for home improvements.

If you are hoping to get on the property ladder with a CCJ or default, remember that it isn’t impossible. You may be required to wait a little longer than you might hope, or you might have to shop around more than another borrower, but the rewards will be worth it in the long run.

CCJs should not block customers from affordable finance

A CCJ, or County Court Judgement is an order by the court to repay your debts. They occur when creditors take a debtor to court if they are behind on their repayments. Before a CCJ is applied, the debtor has the opportunity to repay their debt within a certain timeframe to avoid a CCJ. If they are unable to do so, they will be forced to create a repayment schedule that is based on affordability. A record of the CCJ will remain on the individual's credit report for six years, but in reality, they are left suffering for much longer than this.

Easy target for irresponsible lenders

Since many responsible lenders will reject credit applications from those with CCJs, this opens the door to unscrupulous lenders to target the vulnerable. High-interest loans with obscure terms and debilitating late payment fees can make a bad situation worse for someone with a CCJ on their record. Through no fault of their own, they can be tricked into becoming an irresponsible borrower simply because they do not have access to affordable credit.

Suffering continues long after it is cleared

Individuals with a CCJ on their file will have to wait six years to see it removed. And even after it has disappeared from their credit report, they still have to contend with six years of poor credit history. Credit reporting relies on one thing: borrowing. If you do not have a history of borrowing money and making regular repayments, then your credit history will be poor. In fact, someone with no debt at all will often have a lower credit score than someone with lots of debt, even if the former is acting more responsibly than the latter.

Punished twice

Individuals with a CCJ on their credit report are not just blocked from affordable lending in the form of loans and credit cards. They can also find it a lot more difficult to get a mortgage. This can trap individuals in the rental market and make it more difficult to get on the property ladder in future. With the cost of rent rising, people with CCJs can find that they are punished twice. If they are able to secure a mortgage, they will need to put up a larger deposit or accept higher rates of interest.

Perceptions are changing

Mortgage providers are changing their ways and there has been an increase in the number of adverse credit history mortgages available. However, most high street lenders will automatically reject applications from those with CCJs. This leads to the unrealistic perception that CCJs exclude individuals from getting a mortgage, particularly when individuals aren’t aware of the existence of specialist mortgage providers. Perceptions are changing, but there is still a long way to go to ensure that people aren’t locked out of affordable finance. For example, lenders should look not only at the presence of the CCJ but the CCJ amount and the number of CCJs on record.

Imagine an individual loses their job and has short-term financial problems that lead to a number of CCJs. After securing another job, they repay the CCJ ahead of time and are financially stable again. It seems unfair that this person should be locked out of affordable finance when they have a steady income and an otherwise gleaming credit history. It isn’t only those with CCJs, IVAs and defaults who suffer. Even the self-employed can struggle to obtain credit as a result of their status.

Mortgage providers have a responsibility to ensure they are offering a range of products to all customers and not excluding people based on adverse credit history. And this should include taking into consideration individual circumstances, current affordability and evidence of responsible borrowing.

Can I Get a Mortgage With a CCJ?

A lot of people assume that a CCJ is the end of the road for their finances. CCJs are so feared because many people assume it will land them on some sort of mortgage blacklist and will prevent them from ever getting on the property ladder. The good news is that none of this is true, and even those with a CCJ on their record can often find a way to secure a mortgage.

Finding a mortgage is a headache for anyone, but when you have an adverse credit history, the process can get even more complicated. However, it isn’t impossible to get a mortgage with bad credit, even if you have a CCJ on your record. There are companies that specialise in adverse credit mortgages. A mortgage advisor will be able to help you to find a lender that matches your profile and is, therefore, more likely to accept your application.

More and more lenders are opening up to the idea of approving mortgages for individuals with CCJs. Since a CCJ is just one factor on your record, many lenders are now choosing to look at the bigger picture rather than focus on one component. Every lender will have their own limits as to what they consider to be acceptable, so if you’re ready to put your CCJ behind you and start building your credit profile again, there’s no reason you won’t be able to.

What is a CCJ?

A County Court Judgement, or CCJ, is a type of court order in England, Wales, and Northern Ireland. They are registered against individuals if they fail to repay money that they owe. A CCJ is often the last resort for lenders and it won’t come out of the blue. If possible, you should always work with lenders to find a solution to the problem before a CCJ is registered.

If you pay off the full amount within 30 days of receiving notice of your judgement, you will avoid it being entered on your credit score. Once on your credit report, it will stay there for six years, even if you pay it off in this time. Lenders look at your credit report when making lending decisions and a CCJ on your report can make them less likely to lend you money.

So, how do I get a mortgage with a CCJ?

When making a lending decision, mortgage providers aren’t just looking to punish people with bad credit. They are tasked with finding out about your financial history and using this information to make a decision about the likelihood that you will be able to pay back your mortgage. Having a CCJ on your record isn’t ideal, but it isn’t the end of the story. In general, a mortgage provider will consider the following factors…

Date of the CCJ

The date of the CCJ is perhaps the most important thing that a mortgage provider will consider. If your CCJ was over three years ago, it will be far easier to get a mortgage than if you have had a CCJ registered in the past 12 months.

The date that the CCJ is settled it also of relevance to lenders. Some do not require the CCJ balance to be settled while others will require it to be settled in full for at least 12 months before making a mortgage application.

The amount on the CCJ

The size of the CCJ is another important factor that mortgage providers will consider when looking at your application. Some lenders will have their own limits as to what they consider to be the maximum allowable size for a CCJ. They will weigh the size of the CCJ against things like your deposit and how recently the CCJ was registered.

For example, if the CCJ is over three years old, then most lenders won’t take the size of the debt into consideration. If the CCJ was registered in the past 2 years and are applying for a mortgage of 85% of the total property value, then the maximum CCJ allowable would be around £2,500. A CCJ in the last 12 months should be no more than £1,000.

There are some lenders that will consider higher values, but they will require you to have a higher deposit amount.

Borrowing required

If you have a healthy deposit, then you are more likely to be eligible. Essentially, the most deposit you have, the better your chances.

With a 25% deposit, you could still secure a mortgage even if you have a CCJ registered in the past 12 months.

Number of CCJs

Leaders won’t just look at the amount on the CCJ but also the number of CCJs you have. A single CCJ is less of an issue than 2, and most lenders won’t consider those with more than 2 CCJs registered in the past 2 years.

Lenders are looking for indicators that you could be a high-risk borrower and also want to ensure that your mortgage is affordable.

Is the CCJ repaid?

Most people don’t realise that you can still get a mortgage, even if the CCJ remains unpaid. An unsatisfied CCJ doesn’t automatically mean that lenders will rule you out for a mortgage. Paying off might give you wider access to more lenders, but there are still some lenders that will consider your application, even if the CCJ remains unpaid.

Sometimes, retaining the money for a bigger deposit makes more sense than paying off the CCJ.

The type of mortgage

There are many different types of mortgage and the kind that you choose could impact your eligibility for a mortgage. A standard purchase mortgage offers the best chances of success with a CCJ on your record. Likewise, a remortgage application is likely to be accepted provided you meet the other requirements such as a healthy deposit and regular income. A secured loan against an existing property offers some of the best chances of success for an applicant with a CCJ.

If you are applying as a first-time buyer, the lender might have further restrictions for applicants with CCJs. For example, they might want to see evidence of satisfactory rental payments or they might place a limit on the CCJ amount of around £1,000.

Buy to let mortgages are perhaps the most difficult to access with a CCJ, but again, it isn’t impossible. In most cases, the lender will require a much larger deposit, or they might make you wait for longer than with a residential mortgage.

Your whole credit profile

A CCJ is an indicator that one or more of your loans went unpaid. Lenders recognise that it’s easy to get into financial trouble and that people shouldn’t be punished forever for falling behind with payments. This is why most lenders will look at your credit profile as a whole when making lending decisions. Late payments in the past 2 years can be overlooked if you have a healthy deposit of above 15%. More severe issues such as IVAs, repossessions or bankruptcy can be a lot more problematic.

When shopping around for a mortgage, it helps if you have a complete picture of what situation you are in. Download your credit file from the three different UK credit referencing agencies so that you have a complete overview of how lenders look at you. If you only had one credit account and this resulted in a CCJ, it’s important that you start building up your credit as soon as possible. Lenders want to see a track record of you making payments on time. Time can heal most issues on a credit report, so the sooner you start demonstrating that you can be responsible with money, the better.

Affordability

Above all else, lenders look at the affordability of the loan. They want to make low-risk lending decisions and so they want to lend to people who can afford the repayments. They will look at your income, your existing commitments and make a decision on how much they are willing to lend. Most high street mortgage providers will offer around 5x your annual salary, but when you are working with more niche mortgage providers, this might be reduced to 4x your annual salary.

Check your eligibility for a mortgage with a CCJ

The following table outlines the different conditions and considerations that lenders take into account when making lending decisions. As you will see, a higher deposit means that a CCJ will have less impact on a lending decision. Likewise, time can help to heal most issues with your credit.

Lender	LTV*	Date of CCJ	Date paid off	Other factors
1	95%	All CCJs over 3-year’s old ignored. Declined if registered in last 3 years.	Does not need to be repaid.	No other adverse credit history. Occasional late payments permitted.
2	85%	2 allowed in the last 2 years. No more than £1000 in the past year and up to £2,500 in past 2 years. Ignored after 2 years.	Does not need to be repaid.	Maximum of 2 late payments per month and 2 defaults permissible. No other adverse credit history.
3	80%		Does not need to be repaid.	Maximum of 2 late payments per month and 2 defaults permissible. No other adverse credit history.
4	75%	No defaults in the last year.	Does not need to be repaid.	Only considers adverse credit history from the past 12 months.

*Maximum loan to value

As you can see from the table, different lenders will approach CCJs in very different ways. The theme that links all of these situations is that a CCJ doesn’t have to mean the end of the road for your mortgage application. You don’t even have to wait six years for it to be removed from your record if you have a healthy deposit and your credit report is otherwise clean.

When shopping around for a mortgage provider that will accept CCJs, it’s important to shop around just as you would with a regular mortgage. There are plenty of niche mortgage providers out there that will still consider your application, so don’t assume that you can’t get a mortgage if your first application is rejected.

Building your credit with a CCJ

If you need to work on building your credit up following a CCJ, there are a few simple steps you can take to speed the process along.

It can be difficult to apply for new credit cards and bank accounts with a CCJ, so focus on the ones that you have. Try to always remain within your credit limit and don’t use more than 50% of your credit allowance at any one time.
Focus on making payments on time and building up a track record of good behaviour on your accounts.
If you have a credit card, use it wisely. Paying off your credit card in full every month is an excellent way to build your credit score. Use your card for everyday payments such as food shopping and transport and then pay it off every month.
Make sure everything is up-to-date, including your address details and your open accounts. Leaving accounts open at old addresses is a red flag for many lenders, so make sure everything is paid off and then closed.
Query anything that doesn’t look right. It’s not uncommon for people to be landed with additional CCJs for small amounts, such as old phone bills that weren’t disconnected properly. You might not even be aware of these if the registered address isn’t up-to-date. If something on your credit report looks wrong, don’t be afraid to query this with the company and ask for written confirmation if something is wrong.

While CCJs on your record might not be ideal, it doesn’t mean that you can’t get a mortgage so you should never give up. Work on building your credit and ask for help from the right people if you are serious about getting a mortgage.