Mortgage with a CCJ
Having a CCJ (Crown Court Judgement) will always make getting a mortgage that little bit harder.
However, there are options available to you. Applying for a mortgage with a CCJ is still very much possible. You can still get the right agreement if you know where to get the best advice. My Big Move always recommends that anyone with a CCJ should approach a qualified mortgage advisor to give them the best options moving forward.
Can you get a mortgage with a CCJ?
It can seem difficult.
When you approach a lender with a CCJ, they are less inclined to lend you money at the standard interest rate. This is due to your previous problems when paying back money. Why should they risk a lending agreement, when your previous record of borrowing money paints you in a poor light?
This is how the bank sees it, no matter how honest your situation is.
As such, some banks will look at your CCJ and charge you a higher interest rate on any such mortgage you inquire about.
There are mortgage lenders who specialise in so-called 'CCJ mortgages'. It’s their way of securing themselves: if you want to go with us, you’ve got to prove you can handle these higher repayments. A rise of around 5% higher is normal.
Applying for a Mortgage with a CCJ
Things to Consider
There are a few things you need to check first when applying for a mortgage with a CCJ.
- Check Your CCJ Status:
Confirm your CCJ. Is it currently outstanding or has it now been satisfied?
All CCJs are officially on record when they have not been paid within the first month of judgment. After this period of non-repayment, a CCJ will be issued and it will be present on your credit file for the next 6 years, even if it’s been satisfied.
You need to be sure of this, especially when you’ve already been through the processing of paying it. How far before the six-year limit is reached? It’s much easier to get a mortgage with a CCJ that’s three years old rather than one registered in the last 12 months, for instance. This is valid even if the CCJ is for a much higher amount owed.
If you’ve had a CCJ against you, either recently or in the distant past, it’s important to do a CCJ check on the GOV register to make sure it's accurate.
- Missed Payment Penalties:
If you miss any payments, you could be charged a penalty fee. Confirm this information from the lenders you have approached.
- Evaluate your Chances:
Have you had more than one CCJ? Are you approaching the right lender? How badly have you missed repayments in the past?
- Re-Mortgaging Later On:
Once you have satisfied your CCJ, it is highly recommended that you remortgage as soon as possible, as your new agreement will likely include a reduction in interest.
- Your Deposit:
Depending on how much you have for your deposit, this will influence the lender’s decision on whether to go ahead with your mortgage. If the deposit is high (25%+) then your recent CCJ may be allowed. If your deposit is low (10% or less) then your CCJ might have to be over 3 years old.
Is it easier to get a mortgage with a satisfied CCJ?
Having a satisfied CCJ will cause you less of an issue than an outstanding one.
If you still haven’t repaid your CCJ over a longer period, most lenders will turn you away in an instant.
CCJ and Credit Rating
A CCJ will damage your credit rating, affecting your ability to borrow money. Some lenders do offer special ‘CCJ Mortgages’, but the interest rates on these mortgages will always be much higher than standard mortgages.
This is due to the bank’s reluctance to take you on, as they can see your troubled financial record. A CCJ is three letters that tell the bank ‘This person has had previous credit problems’. The bank will then adjust their rates accordingly.
The general rules for CCJs are:
- The older the CCJ is, the less significance it has to lenders.
- The larger the amount owed for a CCJ, the more significance it has to lenders.
- If a CCJ is satisfied (paid), the less significance it has to lenders.
Should I approach a mortgage broker with a CCJ?
Approaching a mortgage advisor is already one of the best paths you can take when getting a mortgage.
If you happen to have a CCJ, they are almost essential.
How a Mortgage Broker Can Help You Secure the Right Mortgage
A mortgage advisor will be able to offer you advice and support in your search for a mortgage with a CCJ.
They will know the right lenders who offer the best options. They will also have contacts and influence regarding interest rates and payment schedules.
Many people who do not have CCJs hire a mortgage advisor to help them get the best deal.
There will even be mortgage brokers who specialise in helping those with a CCJ.
Where Can I Find the Best Mortgage Advisors?
You’re in the right place!
My Big Move is partnered with a whole host of suitably qualified and regulated mortgage brokers. We can offer you the best advisors to speak with, both local and nationwide.
With our handy search tool, you can find the best advisor for getting a mortgage with a CCJ. All our brokers go through our quality standards and regulations before they become partners, so rest assured that you’re in good hands!