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CCJ Mortgage

Christian Duncan talks to us about getting a mortgage if you have a county court judgment (CCJ) on your credit file.

Can I get a mortgage if I have a CCJ?

Yes. CCJs don’t need to stop you from getting a mortgage. They might just impact the lender we can go to and also the interest rate, which affects your monthly payments.

With a CCJ or any kind of bad credit, our advice is very niche and tailored to the individual. It might be that the mortgage might cost more for the next two years, after which we might be able to take you from a building society or subprime lender to one offering a better rate – maybe on the high street.

Which mortgage lenders accept CCJs?

CCJs are a little bit like defaults, and a default often happens before you get a CCJ. A lot of lenders will accept CCJs. Believe it or not, some of the high street will take them if they are quite small and historic.

If your CCJ is relatively recent, you might need a subprime lender or a building society. But many lenders will accept CCJs. It’s perfectly normal. What one lender thinks is risky and not their bag, another lender might thrive on. There’s something out there for everybody.

Can I pass a mortgage credit check with a CCJ?

There are two types of checks that lenders can do. Some look at your credit score and base a decision on that – which is typically what the high street banks do. Others will credit search, where that search presents information to an underwriter who manually picks it up and works through it.

So one is a computer-based approach and the other is human. With a human, we can have a conversation and explain your circumstances. We can talk them through why you’ve got this CCJ.

With the computer, if it doesn’t fit, that’s game over. In short, though, you can pass credit checks, just maybe not with a high street lender. It’s all subject to circumstances.

Can I get a mortgage with a satisfied CCJ?

Before anybody satisfies a CCJ, they should sit down with a broker. I can’t tell anybody whether they should satisfy a CCJ or not. Morally, of course, they should, but let’s look at your circumstances.

Essentially, some lenders aren’t too bothered whether it’s satisfied or not. They will accept an unsatisfied CCJ, so there’s no need to spend your deposit money on satisfying that. It’s especially important if a mortgage broker finds you can’t do it on a 5% deposit and you need 10% or 15%. We advise on how your circumstances will look best to a lender.

Does the date of my CCJ matter for a mortgage? How old do CCJs need to be when applying for a mortgage?

We can apply on day one of receiving a CCJ. What’s important is if you pick up a CCJ during the mortgage application process, we need to make the lender aware. That’s a change to your circumstances.

Generally, the further back the CCJ is, the better. Typically, three years old for a CCJ is quite a good number. Anything beyond that is just a bonus.

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Does the size of the CCJ affect my mortgage application?

Some lenders do have thresholds, mainly on the high street and with certain building societies. It might be nothing over £500 in the last three years, or nothing over £1,000 in five years. But other lenders have absolutely no limit.

We have arranged a mortgage for somebody with a business CCJ of £80,000. So CCJs and the value don’t need to stop you from getting a mortgage, but they will definitely dictate which lenders are available to you.

Can mortgage lenders still see CCJs after six years?

No. The contents of your credit report renew every six years. If you satisfied a CCJ six years ago today, it would drop off at midnight. Tomorrow, lenders wouldn’t be able to see it.

That said, if a lender asks if you have ever had a CCJ, obviously, you have to answer honestly. It’s unlikely to impact a lending decision, but they would expect full transparency and honesty – as would we, as your mortgage broker.

How do I find out if I have a CCJ?

It’s quite common for people to come to us with ‘no bad credit’ and they get a decline at Decision in Principle stage. We’ll ask them for the credit report, and all of a sudden, there’s a CCJ there. Normally, it’s a parking ticket.

So it’s a great idea to get a copy of your credit report before looking to secure a mortgage. We can use that report to look at your circumstances. If everything’s nice and clean, we can move forward.

Or, there might be things that need tweaking or defaults and CCJs to work around. We’ll take note and find lenders who will view your circumstances in the most attractive light.

How can I improve my chances of getting a mortgage with a CCJ?

Most people would jump to the assumption that satisfying the CCJ will improve your chances. But as I’ve said, that’s not always the case. Working through the report and looking at where it can go would be my first port of call.

We also look at your bank statements and payslips to ascertain the current circumstances and what direction you’re heading in. That’s what an underwriter will do, and as somebody that specialises in bad credit I like to put myself in an underwriter’s shoes.

If I think that I’d lend to this person, there’s a good chance a specialist lender will say the same thing. If I’m seeing a few red flags, lenders are likely to agree. We do a lot of this and have a good understanding of people’s chances of success.

Perhaps people listening don’t want to engage with a mortgage broker and just want a few pointers to take away from this episode. I would advise you not to use any credit facilities if you’ve got CCJs. Try and reduce the balances of credit cards and mail orders, especially on the approach to a mortgage.

Don’t apply for any new accounts because it looks like you’re seeking more credit. If you’re in an overdraft and you’ve got a CCJ, I would advise trying to get out of it as soon as you can. That will make your case simpler.

If we do need to apply while you’re in your overdraft, some lenders will take it, but it’s subject to the underwriter’s discretion. Try to make your circumstances as clean as you can. Personally, though, I’d sit with a mortgage broker and let them do the hard work.

You’ve demonstrated how a mortgage broker can help. Have you got anything else to add?

People with bad credit face a stigma – they may be embarrassed and feel it’s a little bit shameful to speak about it. I’m very open and honest about what we can do for people. Please don’t feel embarrassed.

Sit down with us, send us the report and we’ll look through it. I’m more than happy to give people my time as long as they’re committed to making any changes that we recommend.

There’s no charge for us to have a look at somebody’s credit report.

If we can help you now, fantastic. If we need to wait a couple of months, that’s fine. I’ve been working with one client for 18 months, who found us on social media. His mortgage offer has just come through despite his bad credit – he’s over the moon.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

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