Almas Uddin
Founder and Mortgage Advisor
03 Dec 2023
Mortgage with a CCJ
Having a CCJ can make it more difficult to find a mortgage - but usually not impossible! Let's examine why mortgage lenders might reject a CCJ application - and what criteria they will look for when considering whether they can lend.
Let's examine why mortgage lenders might reject a CCJ application - and what criteria they will look for when considering whether they can lend.
If you need tailored support with finding a mortgage with CCJ history, give the bad credit specialists at mortgage advisors a call on 0330 304 3040.
Applying for a Mortgage With CCJ History - the Basics
Lenders all have different criteria about what they can accept and whether a mortgage with CCJ applicant will be eligible.
Some might be happy to lend provided the CCJ has been satisfied, whereas others will need a minimum number of years to have passed.
In most cases, you can get a mortgage after a CCJ provided over two years have passed. In that scenario, you can generally borrow up to five times your annual income since getting a mortgage with a satisfied CCJ is much easier.
However, you will need to meet the other lending terms to qualify.
Given the higher risk of lending to a mortgage applicant with a CCJ on their credit file, lenders might also ask for a higher deposit, have stricter rules about your employment type, or charge less competitive interest rates.
What are the Criteria for Getting a Mortgage With a CCJ?
Lenders will look at various criteria to decide whether they can offer to lend if you want a mortgage with CCJ history. Firstly, they'll want to know all the details of the existing CCJ itself.
- When Can I Get a Mortgage With a CCJ? - You can get a mortgage after one year, although most banks will need several years to have passed or for the debt to have been settled at least 12 months ago.
- How Debt Values Impact Getting a Mortgage With a CCJ? - if it was within a couple of years and less than £2,500, you have a better chance than with a similarly recent CCJ of a higher value.
- Can I Get a Mortgage With a Satisfied CCJ? - If the judgement were over two years ago, most bad credit mortgage providers wouldn't require the CCJ to have been repaid in full.
- How many CCJs you have had - if you have had multiple judgements against you, you will often need a deposit of 25% to 35% to be considered for a mortgage.
- Can You Remortgage With a CCJ? If you have a good equity level and otherwise present a low risk, you should be able to remortgage with support from a professional broker.
Can You Remortgage With a CCJ With Any Deposit Value?
Your deposit, with most lenders needing at least a 25% deposit for a CCJ mortgage applicant within a year of the judgement date.
Can I get a mortgage with a CCJ and a small deposit? Again, this depends on the lender.
Some will consider a small deposit, provided the CCJ was several years ago and is shortly due to expire from your credit history. Others will command much higher deposit requirements for any applicant with a previous CCJ.
If you’re looking at can you remortgage with a CCJ and have equity of 25% of above, this may be a simpler prospect.
Is it Possible to Get a Mortgage With a CCJ for a Buy to Let?
The type of mortgage you are applying for is also a factor in a bad credit applicant assessment process.
Residential home purchases are more likely to be approved, whereas a buy to let investment will be subject to stricter criteria.
Buy to let mortgages also look at different eligibility factors, so the lender will want to assess the future rental income from the property and how much coverage this offers against the mortgage interest charges each month.
Can you get a mortgage with a CCJ as a new buy-to-let landlord?
If you have a CCJ on your credit file, lenders will likely want to see at least a couple of years of landlord experience, so they have confidence that you're not investing in a first-time rental and will be able to manage the property well.
Can you remortgage with a CCJ on a buy-to-let? This situation normally depends on the projected rental income – if it shows a good business case, you have a far better likelihood of securing competitive financing.
Can You Remortgage With a CCJ and Other Credit Issues?
Other credit issues on top of a CCJ may make finding a mortgage a little more complex, and getting a mortgage with a CCJ that is very recent is also more difficult.
Lenders work on a risk vs reward basis.
In short, they need to know whether they're likely to have to pursue a repossession (always a last resort) and what sort of risk there is that the property isn't going to sell for enough to recoup their losses.
Unfortunately, a bad credit history does mean you're more likely to fall into arrears and thus are a higher-risk applicant for any lender, so getting a mortgage with CCJ history requires expert advice.
They'll want to check your credit file and see what other circumstances there are. Even though a generally minor credit issue, late payments are a more severe scenario when there's also a CCJ to contend with.
Should you have a few minor issues on your credit report, or need a mortgage with 5 year old CCJ history you'll usually still be able to find a mortgage but will need a larger deposit than usual or at least 15% of the property value.
Affordability Requirements to Get a Mortgage With CCJ History
Typically, a bad credit lender will lend up to four or 4.5 times your annual income. However, the deposit required will rely on the dates when the CCJ was registered and repaid – the more recent your CCJ, the more difficult getting a mortgage with CCJ history will be.
Can you remortgage with a CCJ on the same terms? If you have a good level of equity in the property this may mitigate the lender’s risk – and make the application easier than for an initial mortgage applicant.
The below table gives an indicative example of what sort of Loan to Value you can achieve on a mortgage after a CCJ and the standard conditions you might find apply to help you see how getting a mortgage with a CCJ will depend on the circumstances.
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Maximum LTV
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CCJ registration date
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CCJ repayment date
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Conditions
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Lender A
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95%
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It must have been registered over three years ago.
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Repayment isn't essential.
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Must have no further adverse credit issues within three years.
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Lender B
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85%
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Will accept two CCJs within two years, provided values do not exceed £1,000 in the last year and £2,500 in the remainder of the previous two years.
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Repayment isn't essential.
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Must have no further credit issues in the last two years aside from a maximum of two late payments and two defaults.
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Lender C
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80%
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It must have been registered over two years ago.
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Repayment isn't essential.
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None.
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Lender D
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75%
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It cannot be within the last three months.
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Repayment isn't essential.
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Most credit issues are acceptable, provided they were not in the last year.
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Can You Remortgage With a CCJ History?
In most scenarios, you'll be able to find a mortgage provided you've settled the CCJ - in short, you've repaid the debt, cleared the charges and don't have anything outstanding. Getting a mortgage with a satisfied CCJ is similar to any other application.
While most lenders will want to see at least one year of good credit behaviour since the CCJ was settled, there are specialists out there who have more flexible policies.
Take a look at the above table for an indication as to what kind of Loan to Value (i.e. what you want to borrow vs what your property is worth) you can apply for depending on the time element.
Getting a Mortgage With a Satisfied CCJ
Remember that you won't have a CCJ on your credit file forever! If you’re worried that you won’t be able to proceed with a mortgage with CCJ history, delaying your transaction may be worth considering.
Credit issues remain on your report for six years. Therefore, if you're close to that time, it might be worth hanging fire for a few months, as you'll have a much easier time securing a mortgage with a clean credit record.
Likewise, if you've had a few minor credit issues since satisfying your CCJ, it's better to wait for the more serious credit issue to be removed from your report. At that stage, most lenders will offer more favourable interest rates.
Can you get a mortgage with a paid CCJ with better interest rates?
If you’re keen to remortgage and want to know can you remortgage with CCJ history, a similar process applies as for an initial mortgage.
Can You Remortgage With a CCJ That Has Been Repaid?
Mainstream banks and high street lenders won't automatically accept your application when you have repaid your CCJ – although finding a mortgage with 5 year old CCJ reports or getting a mortgage with a satisfied CCJ is certainly simpler.
Even though you've paid back the debt, the report still exists that shows you experienced difficulties making payments on another form of borrowing and ended up with a court judgement against you.
It's essential to consult an experienced broker with whole-of-market access to find competitive deals before getting a mortgage with a satisfied CCJ.
Choose the right lender, and you'll lower your monthly repayments, speed up the application process, and can get your mortgage borrowing in place with fewer queries.
Can you get a mortgage with a paid CCJ? Most lenders will ask for some background information, though, so don't be surprised if they request an account from you to give some context as to how the CCJ occurred.
Can you remortgage with a CCJ due to a personal crisis? CCJs arising from sudden, one-off life events such as redundancy are often something a lender will take a more lenient view towards since they can be reasonably confident you won't experience the same situation again.
Can I Apply for a Mortgage With 5 Year Old CCJ History?
You can - although we might recommend you wait. In another 12 months, your CCJ won't appear on your credit file and won't have any bearing on the mortgage application process. Applicants worried about can you remortgage with a CCJ can likewise wait for the credit issue to expire.
However, if you're keen to go ahead with your mortgage or are looking at a time-sensitive property purchase, you might not have that extra year to play with.
Can you get a mortgage with a paid CCJ or a CCJ that is about to expire? The good news is that you'll have a significantly broader number of lenders to choose from than when your CCJ was newer, and most will be reasonably open to considering your application, depending on any other risk factors involved.
Professional Help Getting a Mortgage With a CCJ or Getting a Mortgage With a Satisfied CCJ Account
Is it possible to get a mortgage with a CCJ? As you can see, there are lots of different ways to find a mortgage after a CCJ. Much depends on what sort of deposit you have available and if there are other credit issues to bear in mind – buy before puzzling over whether you can apply for a mortgage, or can you remortgage with a CCJ, professional advice is always useful.
If you'd like to get started on your mortgage application or compare the rates available from specialist bad credit lenders, get in touch with the Revolution Brokers team at [email protected].
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