For people who have a bad credit rating or a poor credit history, it is often assumed that obtaining a mortgage is completely off the cards. High Street banks and lenders frequently place great emphasis on an individual’s credit score and anything which negates this can ultimately have an impact on your chances of getting a mortgage. As a result of this, in the past CCJs or County Court Judgements have been seen as a major red flag in the mortgage application process, preventing many people from securing the money they need for a property purchase, or even starting the application process at all.
However, in recent times specialist lenders have moved towards a much more detailed assessment of individual circumstances on a case by case basis. Today, mortgage brokers utilise a vast range of criteria when assessing mortgage applications, meaning that there are more lending options for those with bad credit ratings or even CCJs. Despite the impact the Covid-19 pandemic has had on people’s personal finances and the economy as a whole, in 2021 the property market remains buoyant, and specialist lenders continue to offer deals to people who may otherwise be rejected elsewhere.
What is a CCJ (County Court Judgement) and how do they affect the mortgage application process?
CCJs or County Court Judgements occur when an individual is taken to court if they fail to pay money which is owed to another individual or company. CCJs can have serious long lasting effects on credit ratings, staying on file for six years.
Unsurprisingly, lenders do not look favorably on CCJs as they suggest a bad track record of paying back debt. In fact, in many cases they can make it much more difficult to secure a mortgage.
Yet, that doesn’t mean it’s impossible to get a mortgage.
I have a CCJ – can I still get a mortgage?
The short answer is yes, you can get a CCJ mortgage. As mentioned above, there are specialist mortgage brokers and mortgage lenders out there who are able to advise on the best mortgage deals for people with bad credit ratings.
Is there anything which could help my chances of securing a mortgage with a CCJ?
Your mortgage broker will be able to guide you through the process to help ensure you get the best mortgage deal, however there are a few pointers to be aware of which could help with the application process.
For example, if your CCJ has been classed as ‘satisfied’ (in other words, the debt has been settled), a lender is more likely to look positively on your mortgage application. For debts which are still outstanding, the financial amount of the CCJ can also have an impact on how the application is viewed.
Plus, the more time that has passed since you received your CCJ, the better. Therefore, if the CCJ only recently appeared on your credit report, it could be a good idea to wait a year or so before applying for a mortgage.
And remember, the larger the deposit you have to put down, the better. In any situation, in order to get the best mortgage deals you want to ensure that you have the lowest loan-to-value ratio (LTV) as possible – but this is even more important if you have bad credit or a CCJ.
