Mortgages with a CCJ
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Updated on May 16th, 2022
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What is a CCJ?
In England, Wales and Northern Ireland, a court can issue a type of order called a County Court Judgement (CCJ) against you if you have failed to meet the agreed repayments on a loan. A CCJ can be issued against individuals or companies.
You will not have got to this stage without plenty of correspondence from your creditor in the form of bills, reminders, perhaps emails, and finally a formal warning letter informing you that if you do not pay the debt, nor get in touch to make arrangements to pay, then court action will follow. They will also outline what steps you can take to avoid court proceedings starting.Read More
If you still do nothing, then you will be sent a County Court claim form. You must respond to this promptly to avoid further escalation, and should give details of your financial situation, which the court will take into account when making a judgement. This is your opportunity, if you dispute the debt, to put forward your side of the case. If you do not respond, then the court could order you to pay the amount owed in full, immediately.
The court could rule that there is a debt to pay, in which case they will send you a judgement, outlining:
- The amount you owe
- Whether you should pay in full, or in instalments
- Who you must pay?
- The deadline for payment
If you pay off the debt in full right away (plus any interest and court fees), then a CCJ will not be recorded against you. However, if you don’t, your CCJ will be registered in the Register of Judgements, Orders and Fines, meaning it will also appear on your credit history report.
Mortgages with a CCJ Information
When do CCJ's expire?
You might be surprised to know that 71% of people are not aware of how long a CCJ remains on your credit record, and 40% of those we quizzed thought it was a permanent mark. In reality, a CCJ stays on the Register of Judgements, Orders and Fines (and therefore also on your credit report) for six years.
However, if you are able to play off the debt within a month of the CCJ being issued, then it will be removed, as mentioned above. And if you clear the amount owed later than a month after the ruling, the CCJ will be marked as ‘satisfied’, showing people that you have settled.
All bad credit marks are removed eventually, but it might still be possible to get a mortgage before the CCJ expires. With expert advice and assistance, we could find the right lender who will be able to offer a mortgage to suit your situation sooner than you expect, especially if you have other more favourable circumstances to be considered.
How bad are CCJs for my Credit File?
CCJs are a matter of public record, and will show up on any report on your credit history provided by a reference agency. When you apply for a financial product, like a credit card, personal loan or a mortgage, lenders use these reports to assess their risk and your reliability when it comes to financial matters. How a CCJ is viewed by a lender might depend on the amount involved, how much time has passed and whether the CCJ has been marked as ‘satisfied’.
Credit reference agencies are able to gather information on people’s credit habits in order to supply information to lenders, so they can make informed decisions when it comes to lending people money.
There are two types of financial information available. ‘Credit account information’ refers to how much you owe to various private lenders or credit companies, and how you are managing those accounts. ‘Public information’ refers to credit issues handled by the courts or authorities – administration orders, debt relief orders, bankruptcies, IVAs (individual voluntary arrangements) and information held on the Register of Judgements, Orders and Fines, and electoral roll.
CCJs fall under ‘public information’, and the record will be available to any 3rd party conducting a search in the Register of Judgements, Orders and Fines. It’ll stay on your record for six years, or will be marked ‘satisfied’ if you settle the debt, after which it should have no effect on your credit score.
How do I know if I have got a CCJ?
You might have just been refused credit, but why this happened is a mystery. The most straightforward way to find out more about your credit record is to contact one of the main credit reference agencies in the UK and ask to see a copy of the information they hold on you, or, in the case of a CCJ, you may want to go straight to the Register of Judgements, Orders and Fines and, for a one-off fee of £4.00, check to see what is registered against your name.
Perhaps the circumstances around the debt were unclear, or you may have moved house or memories of events years ago have faded. The courts would have sent a notification but the paperwork might not have reached you, or maybe you were simply not able to deal with correspondence at the time for whatever reason. Either way, you can get certainty by checking the CCJ register.
Can I get a mortgage with CCJs?
Yes, it is possible for you to obtain a mortgage while you have one or more CCJs on your record, but the lender’s decision will depend on a number of key elements, including:
- When the CCJ was registered. The longer ago, the better. A CCJ registered in the last year will be more of an issue than one issued three years ago or more. A good-sized deposit will go a long way to countering the impact of a recent CCJ.
|Age of CCJ||Possible LTV Effect|
|Less than 12 months||The amount owed should be a maximum of £1,000 for you to be considered for an 85% LTV mortgage, if the CCJ was registered within the last year.|
|Within 24 months||The debt should be a maximum of £2,500 for you to be considered for an 85% LTV mortgage, if the CCJ was registered within the last twelve to twenty-four months.|
|+2 Years||If the CCJ is more than two years old, the amount will have little effect. However, if it is more recent, then the value will have an impact on the loan offer.|
- How many CCJs you have. More than one recent CCJ will make life a bit difficult for you when applying for a mortgage. A lender will not want to see more than two CCJs against your name from the last two years if you are applying for a mortgage with a high loan-to-value (LTV) ratio, but they may be more flexible if you have a large deposit and the CCJs are more than 12 months old.
- The amount owed under the CCJ. If the CCJs was for a larger amount, then you may have to accept a lower LTV – perhaps 65%-75% – according to the individual lender’s rules on what they are prepared to offer in these circumstances. These vary from lender to lender.
- Whether the CCJ was marked as ‘satisfied’, and when. You’ll still have options if it is ‘unsatisfied’, but you’ll have a greater pool of mortgage lenders to choose from if the debt is shown as having been paid off.
- Can I get a mortgage with a satisfied CCJ? – Many lenders will insist that the CCJ has been satisfied for a minimum of 12 months before a mortgage application is made, but others will be happy so long as it is satisfied prior to applying.
- Can I get a mortgage with an unsatisfied CCJ? – If you are unable to, or do not want to satisfy the CCJ, then the date of registration is important. Some specialist lenders will consider your application, but they will likely insist that the CCJs are at least two years old.
Getting a Mortgage with a CCJ
All lenders, regardless of an applicant’s circumstances or credit status, will want to conduct an affordability assessment to work out how much they will be willing to offer you for a mortgage.
In the case of CCJs, the lenders may take a different approach to this assessment, especially if the CCJ was recent, or for a larger amount, and remains unsatisfied. If accepted, the mortgage may cost you more in terms of a higher interest rates and fees, and you might only be able to borrow a lesser amount.
Remember that a specialist mortgage broker will be able to help you overcome most obstacles, and will know the best providers to deal with.
Repairing your credit score
Even if you have a CCJ against your name, we can work to find the most approachable lenders in the market and a mortgage to help you own your home. But there are also a few steps you can take to help yourself and improve your credit rating, to build goodwill with the lenders.
Bad Credit Mortgage Brokers
Please don’t be put off by any bad previous experiences with high street lenders or mainstream brokers. Our specialist team works with hundreds of people in similar circumstances to yours every year, helping them to get back on track, obtain a suitable mortgage and own a home.
We’ll do everything we can to assist you in securing a bad credit mortgage with CCJs, as well as other adverse credit events. The specialist lenders who are set up to help you most are not found on the high street – our years of experience with bad credit mortgage lenders across the UK means we know exactly who to approach to find a mortgage that suits your individual needs, whatever your credit history.
As unlimited mortgage brokers with access to the whole mortgage market, we are not tied to any products or packages from any lenders. Our impartiality and unlimited access means that we are able to give you honest, in-depth advice, walk you through the processes, and give you the best chance of success in getting a competitively-priced bad credit mortgage with a CCJ.
Mortgages with CCJs FAQs
- What is a CCJ?
- How do I pay off my CCJ?
- How can I remove a CCJ?
- Do I need to satisfy my CCJ before I can get a mortgage?
- What is the maximum size CCJ that lenders allow?
- Does having a CCJ reduce the amount I can borrow?
- I have paid my CCJ off - why doesn’t it show as satisfied on my report?
- What happens if I ignore a CCJ?
CCJ stands for County Court Judgement – a type of order a court in England, Wales and Northern Ireland can issue against individuals or companies if they have not kept up with repayments on a loan as agreed.
When a court rules against you in a case where you have not paid money back to a creditor, they will send you a judgement detailing how much you owe (the debt amount plus any court or legal fees), who you should pay (not necessarily the court, more likely the creditor or their representative), when you should pay by and how you should pay. If they are aware you are in financial difficulties, the court may allow you to pay in instalments, and the judgement will again detail the regularity and amounts.
You can get a CCJ removed by paying the amount of the debt in full to the creditor within 30 days of the court issuing the judgement against you, otherwise the CCJ will remain on your credit history for six years, after which is falls out of scope. It can also be removed if it was entered in error – you will need to contact the claimant and ask them to acknowledge the error, copying this message also to the credit reference agency who hold it in their records.
It’s advisable to clear CCJs if you can, but it might not preclude you from obtaining a mortgage. Different lenders take different approaches to applications, but their main criteria are usually:
- How long ago was the CCJ registered? – In general, the more historic the event, the better.
- What amount was the CCJ for? – This will show your current level of liability, and may affect the loan-to-value ratio of their mortgage offer.
- How many CCJs do you have? – A string of recent CCJs will have more negative impact than one CCJ a few years ago.
- Do you have any other credit issues? – A lender will always want to know the full picture of your financial situation.
Criteria for loan applicants will vary from lender to lender, and they will usually consider the age of a CCJ in conjunction with its size when making a decision. Some may disregard CCJs over two years old and accept a couple within the last two years if their value is under £1000 during the last year, and no more than £2500 the year previous. If you are able to put down a bigger deposit, they are likely to be more flexible about CCJs.
Because one or more CCJs will affect what you could afford to pay on a mortgage, it could influence what lenders are willing to offer you. The older the CCJ, the less impact it will have, but if you have more than one, and they’re comparatively recent and still yet to be satisfied, then this will carry more weight in their decision. As ever, if you have a sizeable deposit, then a lender is likely to be more flexible with their criteria.
If you have paid off the debt, the creditor or their agent should send you a letter confirming the debt is cleared, and also contact the court to advise them you have satisfied the CCJ. However, as things take time to go through the system, this does not happen instantly, but you should request new copies of your credit reports from the three main credit reference agencies after a few weeks to confirm that the records have all been changed.
If it is still not showing as ‘satisfied’, then you need to notify the court right away for advice – make sure you have a copy of the judgement details and proof of payments handy. They can provide you with a certificate of satisfaction for a small fee, which you can show to a prospective lender while your credit report details are updated.
It is never wise to sweep financial problems under the carpet. Ignoring a CCJ means in the least it will stay on your record as unsatisfied for six years, and can lead to further action being taken against you, such as a visit from a bailiff or even a charge on your property.