CCJs and Re-Mortgage
Many people today are thinking about remortgaging their homes, either because they need funds or because they want to pay off an existing mortgage and change to another. If you’ve had a County Court Judgement in the past, this will affect your ability to acquire lending but it does not necessarily preclude you from getting a mortgage or indeed a remortgage.
If you have a CCJ on your record, this means that a creditor you owed money to, and failed to meet the payments, has applied to the County Court in an attempt to secure the payment from you that way. Typically, the judge in these cases makes a decision about what/ when you should pay them. If you settle the debt within a month of the judgement, the CCJ should not normally be placed on your record, however it will be if you do not, and it will remain on record for 6 years.
When you apply for credit or lending of any kind, particularly substantial borrowing such as a mortgage, the lender will typically use a credit reference agency to carry out credit checks on your past financial history. They then use various resources, one of which is the register on which CCJs are recorded. This can cause some lenders to refuse you the borrowing on this basis, but there are more and more lenders willing to consider you in spite of a CCJ.
The reality is that if you have a poor credit rating, and/ or a CCJ against your name, you are not going to be offered the best deals on credit. You may find that you’ll have to pay high rates of interest for any borrowing that you’re given following a CCJ. However, if you’ve done your sums and worked out that it’s still worth remortgaging your property, you will indeed be able to if you approach the right lenders.
Many people look to secure remortgaging through a mortgage broker. The broker will have access to the range of different deals that are available to you and is therefore well placed to help. You may be surprised to find that there are a range of options available to you.
Given the current financial situation that has affected so many of us, a lot of people are seeking remortgages as a way to get hold of funds, for example to consolidate other debts. As a result of this, more options are becoming available to consumers however bad or good their credit history is.
As always, make sure you understand the terms of any remortgage deal you’re offered. Work out what the cost will be each month, not only initially but over the term of the new mortgage, taking into account that interest rates may change during this period.
Work out what the impact of paying an increased interest rate will be on the total amount that you end up paying back in total. Compare this to what will happen if you stick with your current mortgage and make sure it’s definitely worth making the change before taking any decisions.