If you’re looking to purchase but worried about a CCJ, then you may be under the assumption that no lender will make you an offer. However, getting a mortgage with a CCJ is possible. Adverse credit mortgages are available, you may just have to do some more digging for a lender or specialist broker.
Getting a mortgage with a CCJ
As the market continues to develop, more lenders are now offering mortgages to cater for those with bad credit.
CCJ mortgage lenders vary in what they deem bad credit, and what they will accept on a credit file. Some are more lenient than others. So, searching for a lender can become a lengthy process if you’re doing it on your own.
Any lender will assess a prospective borrower on a range of criteria. Therefore, it’s not always a CCJ that could cause a decline. Your CCJ may be acceptable, but your income, deposit or property type may not meet the requirements. If you don’t know what you’re doing then it’s best to speak to an advisor that can target specific deals and lenders.
When was the CCJ issued to you?
When it comes to the CCJ, there are several factors that an adviser or lender will look at. The most important is when was the CCJ issued? The older it is the simpler it is to secure a deal. However, if it’s still within the last 12 months you were issued with it then it could still be possible to secure a deal as-long as you have a larger deposit.
What date was it satisfied?
The date the CCJ was satisfied is also important. Some lenders require a CCJ to be fully settled and repaid, whereas others don’t require settlement at all. Lenders tend to ask that the customer has a higher deposit if it’s not settled – typically around 15%.
How much was the CCJ for?
The size of the CCJ will also sway a lender to saying yes or no. Most lenders will limit the amount they’ll look at if your CCJ is recently issued. If it’s within the last 12 months then typically £1,000 is the maximum lenders will agree to look at. If the CCJ is old, around 2-3 years ago, it can be upwards to any value and they’ll look at it. But if this is the case and the CCJ was a larger amount you may need to have a deposit of around 25-35%.
How many CCJ’s have you had?
If your Loan To Value (LTV) is high, lenders will limit the number of CCJ’s they can accept usually to 2 in the last 24 months.
How much deposit will you need?
The more deposit you can get together the better are your chances of getting a mortgage with a CCJ. If you have a 5% deposit your CCJ’s need to be over 3 years old. If they’re within the last 12 months, or you have a number of CCJ’s, you’ll need to save 24-35%.
What are you looking to mortgage?
The type of mortgage you’re looking for will also affect your chances with a CCJ. Purchases and remortgages offer the best chances of acceptance.
If you’re a first-time-buyer you may find you’re given additional restrictions, lenders unable to accept if the CCJ amount is over £1,000, or other criteria you must meet to reassure the lender you’re a sound investment.
Buy to Let properties come against the most restricted if you have a CCJ. A lender may require a much higher deposit or decline the mortgage until the CCJ is fully cleared or a certain age.
Getting a mortgage with a CCJ
If you’re trying to get on the property ladder and you’re unsure of whether or not you will be accepted due to a CCJ it is best to seek professional advice. Specialist lenders and adverse credit mortgages are out there, and you could be eligible. Seek a mortgage adviser that can work the whole of the market to search all the deals out there. A lot of mortgage brokers have access to lenders and deals that high-street banks don’t have access to or offer. If you’re in doubt, or you feel you’ve exhausted the main lenders then consulting a broker could be more worthwhile.
The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Money.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.