Can I Get a Mortgage With a CCJ?

A County Court Judgment — CCJ — does not necessarily prevent you from obtaining a mortgage.

But the details matter.

A lender is unlikely to look only at the question:

"Does this applicant have a CCJ?"

It may also consider:

• When it was registered
• How much it was for
• Whether it has been satisfied
• When it was satisfied
• How many CCJs there are
• What caused it
• Other credit problems
• Credit conduct since
• Deposit
• Loan-to-value
• Income
• Affordability

That is why two applicants who both answer "yes" to having a CCJ can have very different mortgage options.

What Is a CCJ?

A CCJ is a court judgment in England and Wales confirming that money is owed.

For a mortgage lender, it is an indication of previous credit difficulty.

The significance depends upon the complete circumstances.

The Date Matters

A recently registered CCJ is generally a different risk proposition from a historic one.

As adverse credit becomes older, potential lender options can change.

Lenders may use different time periods within their criteria.

This is why statements such as:

"You must wait X years after a CCJ"

are often too simplistic.

There is no single waiting period that applies to every lender and every case.

The Amount Matters

Consider two applicants.

Applicant A

One historic CCJ for a relatively small amount.

Applicant B

Several recent CCJs totalling many thousands of pounds.

Both have CCJs.

They do not present identical mortgage risks.

Lenders can apply limits concerning:

• Individual CCJ amounts
• Total CCJ values
• Number of CCJs
• Recency

Does Satisfying the CCJ Help?

Paying a CCJ does not erase the fact that it existed.

However, whether it has been satisfied can be relevant to lender assessment.

It demonstrates that the judgment debt has been dealt with.

Different lenders may have different requirements concerning:

• Whether satisfaction is required
• How recently it was satisfied
• Whether proof is needed

What Caused the CCJ?

Context can matter.

A lender may potentially distinguish between circumstances such as:

• A disputed bill
• Historic financial difficulty
• Business failure
• Relationship breakdown
• Repeated unpaid credit commitments

That does not mean a reasonable explanation makes the CCJ disappear.

But an underwriter may want to understand what happened and whether the problem is likely to recur.

What If I Did Not Know About It?

Occasionally borrowers discover a CCJ only when checking their credit report or applying for finance.

Potential reasons can include:

• Correspondence sent to an old address
• Disputed accounts
• Administrative problems

If you believe the judgment is genuinely incorrect, obtain appropriate advice about whether it can be challenged or corrected.

A mortgage broker cannot remove accurate adverse-credit information.

What Else Is on the Credit File?

The CCJ should not be assessed in isolation.

A lender may also see:

• Defaults
• Missed payments
• Arrears
• High balances
• Payday borrowing
• Other judgments
• Recent searches

One historic CCJ surrounded by otherwise clean credit can therefore look different from a pattern of continuing financial difficulty.

Deposit and Loan-to-Value

Deposit can be especially important in adverse-credit cases.

As loan-to-value reduces, potential lender options may improve.

For example, somebody with a 20% or 25% deposit may have different options from an applicant requiring a 95% mortgage.

That does not mean a particular deposit guarantees acceptance.

It is simply one of the factors affecting the overall risk.

Will I Pay More for the Mortgage?

Possibly.

The more recent or significant the adverse credit, the more likely the available lender pool and products may differ from standard mainstream options.

That can result in:

• Higher interest rates
• Product fees
• Lower maximum loan-to-value
• Different early repayment charges

The complete cost should be considered when assessing whether proceeding now is appropriate.

Should I Use a Specialist Lender?

Not automatically.

The objective is not to assume that everybody with a CCJ needs a specialist lender.

Depending upon:

• age of the CCJ;
• amount;
• satisfaction;
• deposit; and
• other circumstances,

mainstream or building-society options may sometimes exist.

In other cases specialist adverse-credit lending may be more appropriate.

Research should determine the route.

Can I Get a Mortgage if the CCJ Is Unsatisfied?

Potential options can be considerably more restricted.

Whether a lender is prepared to consider an unsatisfied CCJ depends upon its criteria and the complete circumstances.

Do not assume that paying it today will automatically make every lender available tomorrow either.

Check the likely mortgage strategy before making assumptions about timing.

What Should I Have Ready?

Before lender research, it is useful to know:

• Registration date
• Amount
• Satisfaction status
• Satisfaction date
• Number of CCJs
• Reason
• Other adverse credit
• Current debts
• Deposit
• Income
• Required mortgage

A complete credit report can be particularly helpful.