Mortgages with CCJs

If you’ve had financial bumps in the road – a lot of people have, so you’re certainly not alone – you might worry about getting a mortgage. It’s understandable, as there’s a lot of information out there scaring you off, telling you how defaults and CCJs are disastrous for your credit history, and how they put a mortgage out of reach. But, what if we told you that’s not necessarily the case?

You might assume that having a County Court Judgment (CCJ) or a default might take getting a mortgage off the table, but there are actually funding options out there for you. Though CCJs and defaults on your credit report can make getting a mortgage slightly more complicated, there are still plenty of lenders willing to consider your application and approve you for a bad credit mortgage. Plus, the entire process is made even easier with the help of an experienced mortgage broker like Everest Mortgages.

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What is a CCJ and how does it affect a mortgage application?

If you have a flawless credit record, you’ll have your pick of fixed rate mortgages and tracker mortgages, even no deposit mortgages and 100% mortgages are likely to be an option. But, if you have a CCJ, your options are going to be somewhat limited.

A CCJ – which stands for County Court Judgement – is a formal court order issued when you fail to repay money owed to a lender, company or individual. It’s often the next step after missed payments or a default, and it means the court has decided that the debt is valid and you need to pay up.

A CCJ will appear on your credit file for 6 years, which can affect how lenders assess your reliability as a borrower. Though that might sound daunting, it doesn’t mean your mortgage dreams are over. With the help of Everest Mortgages, many people successfully get mortgages with CCJs.

What about getting a mortgage with defaults?

It’s a similar story when it comes to getting a mortgage with defaults. A default is recorded when you’ve missed several payments on a credit agreement, such as a loan, credit card or utility bill. While lenders do take them seriously, they’re generally seen as less severe than a CCJ, as they don’t involve court action. If your default was a while ago, if it’s been settled or it was only for a small amount, some lenders may be willing to overlook it.

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Can you get a mortgage with CCJs?

There’s a common misconception that you can’t get a mortgage with CCJs, but that’s not entirely true. You can get a mortgage with CCJs, you just might have to settle for slightly higher rates and less favourable terms to start with.

To determine if you’re eligible for a mortgage with CCJs, lenders will look at your full financial profile. This takes CCJs, defaults and debt management plans into account, as well as how long ago your financial issues started and if they’ve since been resolved.

Lenders look at when the CCJ was issued. The older it is, the less impact it tends to have.
They’ll consider if it’s been satisfied. Paid or settled CCJs are viewed more positively by lenders.
The amount of CCJ has an impact, with smaller debts being less of a concern.
Your current financial behaviour is also taken into account. Showing consistent payments and no new credit issues increases the chances of you being approved.

Interest rates on mortgages with CCJs and defaults

If you have CCJs or defaults, you should expect mortgage interest rates to be higher than what lenders offer applicants with good credit, but only slightly. Every lender is different and the exact interest rate you’re offered will depend on a variety of factors, such as the age of the CCJ or default, the amount and whether the debt has since been repaid. Once CCJs and defaults disappear from your credit file, you can think about remortgaging to secure a better rate.

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Tips for getting a mortgage with CCJs or defaults

If you’re planning to buy a property and you have CCJs or defaults on your credit file, you’ll need to do everything you can to strengthen your mortgage application.

You can boost your chances of being approved for a bad credit mortgage by:

Checking your credit report

It’s a good idea to get a full copy of your credit report to see exactly what lenders will see. This will also highlight if there are any issues, such as CCJs or defaults, that have been incorrectly logged.

Settling any outstanding CCJs or defaults

If you can, settle any outstanding CCJs or default. CCJs and defaults that have been satisfied look better to lenders than those that are still outstanding.

Explaining your situation

If you’re applying for a mortgage with CCJs or defaults, you can’t shy away from explaining your situation. If there were genuine reasons behind your credit issues – such as redundancy or illness – it’s best to be honest with lenders. They appreciate having the full picture.

Avoiding new credit applications

There’s nothing wrong with applying for credit occasionally, but too many recent credit checks can make lenders wary. Avoid new credit applications in the months leading up to your mortgage application.

Working with a bad credit mortgage broker

We’re experienced in bad credit mortgages and we know which lenders are most understanding of your circumstances. We’ll help you to find lenders that offer mortgages with CCJs and defaults, saving you time, stress and unnecessary delays.

At Everest Mortgages, we have access to lenders who take a more relaxed view of past credit issues. Even if you’ve been turned down elsewhere, our team can help you to find the best possible deal for your circumstances.

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