Can I Get a Mortgage With a CCJ?
Published 2nd October 2017
The question “can you get a mortgage with a CCJ?” is one of the most frequently asked by our visitors and, thankfully, to most of them we can say YES!
Finding a mortgage can be tough at the best of times, and for anyone with adverse credit, whether recent or more historic, things can seem impossible. The good news is that adverse credit mortgages are available and getting a mortgage with a CCJ is certainly possible – you just need to know where to go for the right advice.
There are a growing number of lenders considering approving mortgages for people with CCJ’s as the market continues to develop. Each of these CCJ mortgage lenders vary widely in what they deem acceptable specific to the CCJs on a customers’ credit file, but also on a whole range of different criteria, and it isn’t always just the CCJ that causes a decline. For instance, your CCJ may be acceptable, but many will have other criteria you don’t perhaps meet in terms of income and affordability; other credit history issues; deposit; property type etc.; which can all make it a nightmare for anyone who doesn’t really know what they are doing. Thankfully we do, as do the specialist CCJ mortgage brokers we work with – make an enquiry and we’ll pass you over to them immediately.
So, will I get a mortgage with a CCJ or not?
There are several key factors that impact whether you’ll be eligible for a mortgage with CCJs as outlined below. For an overview of what’s possible see our eligibility charts here:
Date of CCJ
How recently the CCJ was registered is probably the most important factor when it comes to getting approved. It’s far simpler to mortgage with a CCJ that is over 3 years old than one registered in the last 12 months (although still possible with enough deposit). The date it has been satisfied is also important, as where some lenders don’t require settlement at all; others require it to have been settled for at least 12 months.
Amount of CCJ
The size of the CCJ is secondary to the date of registration but still crucial, as most specialist lenders limit it to a certain level if registered more recently. If over 2-3 years old then it can be pretty much any value, but within 2 years the CCJ size would be limited to approx. £2,500 if borrowing up to 85% Loan to value. If within the last 12 months then £1,000 maximum. There are lenders that consider larger CCJs but they will usually require a minimum deposit of 25-35%.
The more the better! If you have 5% deposit then your CCJs will need to be over 3 years old minimum. If you have 25% or more then you may still be eligible with CCJs registered in the last 12 months.
Number of CCJs
Typically at higher loan to values, specialist CCJ mortgage lenders will limit the number of CCJs registered in the last 24 months to 2, with less or no restrictions if registered over 2 years ago. If you have 25-35% deposit then lenders can consider a larger number of CCJs so long as they are over 12 months old.
Is the CCJ satisfied or unsatisfied?
Many borrowers don’t realise you can get a mortgage with a satisfied CCJ, let alone an unsatisfied CCJ. The lenders are different depending on whether you have satisfied it or not, paying it off giving you a wider range of lenders to choose from, but is not always necessary if you don’t want to go to the trouble of repaying it prior to application.
Getting a mortgage with an unsatisfied CCJ: If registered over 2 years ago then there’s no requirement for the CCJ to be repaid with some of the specialist lenders, others demand it to be repaid.
Getting a mortgage with a satisfied CCJ: Those that only approve mortgages with paid CCJs are happy for this to be done before application, whereas others stipulate it’s paid off a minimum of 12 months prior to application.
Mortgage type (purchase/remo/secured/BTL)
The type of mortgage you are looking for can impact which lenders you’ll be eligible with when it comes to CCJ mortgages. Standard purchases and remortgages with CCJs tend to offer the most flexible criteria and likelihood for acceptance. If you are purchasing a new property as a first time buyer there can be additional restrictions and criteria for you to meet, with some lenders not accepting CCJs over £1000, and others requesting 6 months of satisfactory rental references.
If you are purchasing a buy to let property then these lenders are much more restrictive when it comes to CCJs and defaults and you may either be required to provide more deposit or wait until they are of a certain age (longer than for residential) before you can apply. Secured loans for people with CCJs are actually the most flexible and if the borrower has sufficient equity they may be able to obtain further borrowing on their property even if they are declined for a straightforward CCJ remortgage.
Other credit issues
If you have any other credit history issues then these may well impact the likelihood of approval. Lesser issues such as late payments are generally acceptable within the last 12-24 months up to 85% Loan to value, so long as they don’t extend to more than 3 months late at any one time – if they have, then you’ll likely need more deposit. Other more severe issues such as debt management plans, IVAs, repossessions and bankruptcy can cause further issues.
These specialist lenders may offer a lesser amount on their affordability models than the high street, and some restrict lending to 4x income on a mortgage if you have had CCJs. If the CCJs are older than 2 years you may be able to obtain 5x income but this is subject to passing with the appropriate credit score. Your income is also a factor here – if you are employed you may be restricted if you have not been in your job for 12 months or perhaps on maternity leave; if you are self-employed you may be restricted if you don’t have 2 years-worth of accounts (some CCJ lenders are willing to lend based on 12 months trading history).
Eligibility charts for a CCJ mortgage
Mortgages with CCJs and defaults pose similar considerations for lenders, however many of the specialists considering these applications are stricter when it comes to CCJs, with many of them (not all) only accepting a fewer number and size, also stipulating they are repaid and satisfied prior to application. As the chart illustrates, as with most mortgages, the more deposit a borrower has the better.
|Lender||Maximum Loan to value (LTV)||Date CCJ was registered||Date CCJ was paid off||Other adverse credit conditions||Approx. rates to expect (very rough idea at time of writing)|
|A||95%||All CCJs registered over 3 years ago are ignored. Declined if registered in the last 3 years.||Do not need to be repaid||No other adverse credit in the last 3 years – some late payments allowed.||Around 5-6%|
|B||85%||Allowed 2 inside the last 2 years – must be no more than £1,000 in the last 12 months, £2,500 in months 13-24. Ignored if older than 2 years.||Do not need to be repaid||Any late payments (max 2 months late each) and 2 defaults allowed in addition to CCJs, no other adverse if in the last 2 years (no bankruptcy etc).||Around 4-6%|
|C||80%||All CCJs registered over 2 years ago ignored.||Do not need to be repaid||“||Around 4-5%|
|D||75%||No defaults in the last 3 months.||Do not need to be repaid||Most other adverse considered if over 12 months old.||Around 7-11% (for more severe adverse credit)|
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