Should I settle my CCJ before applying for a mortgage?

We received a question below from Tim who wanted to know when the best time was to apply for a mortgage; during or after his County Court Judgement (CCJ) was paid off. I answer his question below in detail.

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Question

Hi Pete. I have a county court judgement (CCJ) that will be paid off in full in the next six months. I’ve been turned down for a mortgage because of my CCJ in the past and am wondering whether it’s worth reapplying in the near future or putting my plans on hold?

Should I delay things for another six months and apply when my CCJ has been settled, or are there mortgage lenders that will consider people who are currently paying off a CCJ?

Many thanks,

Tim, Manchester

Answer

Hi Tim,

Thanks for getting in touch. I’m more than happy to help.

First of all, there’s no need to delay your mortgage application but keep in mind that waiting until your CCJ has been paid off will mean that you have access to a wider selection of lenders, and therefore stand a better chance of ending up with favourable rates.

If you’re eager to push ahead with your application, there are specialist lenders out there who are willing to consider customers with unsatisfied CCJs. They have the flexibility to assess applications on a case-by-case basis, looking at their overall strength and taking factors like the amount left on the CCJ and the amount of deposit you have into account. Putting down extra deposit might even help you qualify for a better interest rate.

Given your circumstances, I would suggest speaking to an independent mortgage broker before you apply for your mortgage. They can help you find a specialist lender who considers applications with unsettled CCJs and can also minimise the risk of ending up with marks on your credit report.

You mentioned that you previously applied for a mortgage and were declined. Lodging too many applications in a short space of time can reflect negatively on your credit file, but using a broker will minimise the risk of being rejected a second time. They can place you with the right lender to handle an applicant with a CCJ against their name, boosting your chances of mortgage approval and securing favourable rates.

Thanks,

Pete

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I answer more questions about CCJ’s and mortgages here:

• Can you get a mortgage with more than one CCJ?
• Is a bigger deposit better for a CCJ mortgage application?
• Can you get a mortgage with a newly registered CCJ?