Finding a mortgage can be especially difficult if you have an adverse credit score. A CCJ, IVA or defaults (any missing payments) on your credit file can put some lenders off.
Although high street lenders are unlikely to consider you for a mortgage with any CCJ’s (County Court Judgements) there are still bad credit mortgage brokers such as Clever Mortgages who will consider your mortgage application.
Your deposit
As with most bad credit circumstances, you typically need a large deposit to get your application approved. With a large deposit, it means the amount you need to borrow is less, resulting in a lower LTV ratio. Therefore a lower LTV makes you a better prospect for a lender and more likely to get a better interest rate.
Interest rates
Due to the CCJ on your credit file, however, it’s likely you’ll only have access to higher interest rates than you would with a good credit history. This is because your interest rate is determined in line with the level of risk a lender perceives with your application. Therefore the greater the risk, the higher the interest rate.
Getting a mortgage with a CCJ
Specialist lenders will probably take a less definitive view of a CCJ and consider:
Is the CCJ satisfied?
Getting a mortgage with a satisfied CCJ is far easier than an unsatisfied CCJ, but neither is impossible. Getting approval will depend on the individual lender’s criteria.
How long ago the CCJ was
Specialist lenders will prioritise how recent the CCJ was when considering you for a mortgage. Many require that any CCJ was settled within the last 12 months. However, the more time since the CCJ was registered, the higher your chances are of getting a mortgage.
The amount of the CCJ
The size of the CCJ is typically less important to the lender than the date of registration; however, it is still taken into consideration. If the CCJ is over 3 years old then any value is usually considered. However, if the CCJ is within 2 years old then it is typically limited to around £2,500 and if it’s within the last year a maximum of £1,000.
A CCJ stays on your credit file for 6 years, even if it is satisfied. You should check your credit file to make sure the information is accurate. It shows whether your CCJ is satisfied or not, which could help your application.
For more information on CCJ mortgages, contact a member of the team at Clever Mortgages.
