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Mortgage | Debt Article


Mortgage with CCJ

There was a time when having a County Court Judgement against you made it extremely difficult to get a mortgage. However, a range of mortgage deals are now available to suit people with less than perfect credit histories.

CCJ

A County Court Judgement is what happens when you fail to pay your debts and the lender applies to the County Court to secure the payment from you. The court then takes a decision as to whether and what you owe and issues a judgement, in which this is laid out, together with how the debt is to be paid.

Credit reference

If a CCJ is issued, the judgement is recorded on a register that credit reference companies check whenever you apply for borrowing. This is why having a CCJ can make it difficult for you to secure any lending, let alone the substantial borrowing required for a mortgage.

However, it is possible to get a mortgage even with a CCJ. You will likely need to approach a lender that considers these circumstances, as many of the mainstream lenders will not.

Your record

First, you may need to check whether you do indeed have a CCJ recorded against you, as sometimes you may not even be aware that this has happened. If you do have one and you settle it within a month, it shouldn’t remain on your record. Otherwise, it will be recorded against your credit reference for 6 years, even if it was only for a small amount.

Credit Record | IVA

Proof

If you have a CCJ on your record for a debt that you have indeed paid off, you can ask the lender to provide written confirmation of this in the form of a Certificate of Satisfaction, which you can then pass on to the lender that you’re seeking the mortgage from.

Options

You should understand before applying for a mortgage if you’ve had a poor credit rating in the past, that lenders are going to consider you a high-risk borrower. This necessarily means that you’re not going to be offered the best mortgage deals, and may well need to settle for whatever you can get, however you should make sure that you get the best deal possible and that you understand its terms.

Terms

Often, you may find that the type of mortgage offered to you will incur high rates of interest, together with various other restrictions. However, if you do manage to secure a mortgage and you do then pay the bills for it in time each month, your credit rating in general should gradually improve. For this reason, you should make sure that you only take on a mortgage that you can definitely afford to pay for, or you could end up in a worse situation.

Broker

You may need to go through a mortgage broker to get a mortgage after a CCJ. The mortgage broker has access to the variety of deals available to you in these circumstances. You may also find that the amount of debt that caused the CCJ may affect the deals that you’re offered, so if the amount wasn’t huge, you may end up getting a better deal than you had expected.