Head of Content
Mortgage Advisor & Director
Having a county court judgment (CCJ) on your credit record can make it more difficult to secure finance, such as a mortgage; but is it achievable for you? Read through our comprehensive guide to find out what your options could be, how to boost your chances of mortgage approval and much more.
What is a CCJ and how do they affect mortgage applications?
A county court judgment, or CCJ, is a type of court ruling you might have against your name if someone takes legal action against you, claiming you owe them money and haven’t responded to requests for it. A judgment will arrive by post if the court agrees the debt is payable.
The judgment will outline how much you owe, who it is payable to and how to pay, along with a deadline for when the debt needs to be settled by. A county court judgment will remain on your credit reports for six years, unless you clear the debt within a month.
With a CCJ on your credit files, it can be more difficult to secure finance, such as a mortgage. The majority of lenders will prefer the judgment to have been fully discharged.
Even after this point, mortgage providers might view your application with caution until the CCJ has disappeared from your records after the six years, which means you could end up with higher interest rates or have to put down extra deposit to reduce the level of risk.
Can you get a mortgage with a CCJ?
Yes but some lenders will want the CCJ to be satisfied before they will even consider you for a mortgage. Even a satisfied CCJ can impact your application, though, and make it harder to get approved, but the good news is that your chances of success will increase over time.
While it’s possible to get approved for a mortgage with an unsatisfied CCJ, the number of lenders and deals available will rise when it has been paid off, and as time passes, steadily improving right up to that six-year mark when the issue disappears from your credit reports.
The mortgage lender will assess your CCJ by reviewing how long ago it was registered, the number of judgments you have against you and the total amount they are for.
Depending on how much of a risk they think your bad credit poses, your lender might ask you to put down additional deposit or only approve you at a higher interest rate.
Lending criteria for people with this bad credit type
The lending criteria for borrowers with CCJs can vary from one mortgage provider to the next, as some have a higher appetite for risk than others. Firstly, they will review the circumstances surrounding your county court judgment as part of their standard credit checks.
Mortgage lenders will look at the following variables when assessing a CCJ:
- When it was registered: Judgments registered in the last 12 months can have a far greater impact than ones that were registered at least three years ago. Having a CCJ against you in the last year is more likely to mean having to pay a higher deposit.
- How many CCJs you have: Having more than one judgment is more likely to mean restrictions from the lender, such as a cap on the loan-to-value (LTV) ratio.
- How much they are for: Higher value CCJs can affect the LTV ratio mortgage lenders are willing to offer and could drive it down to within the 65% to 75% region.
In summary, the older your CCJ is, the better, and you will stand a far greater chance of securing the mortgage you need if the issue has been satisfied. There are usually options for borrowers with multiple CCJs and higher value judgments, but your prospects will obviously be better with only one judgment against you, or if the total is a relatively low amount.
Other eligibility factors
In addition to reviewing your CCJ, mortgage lenders will also base eligibility on these factors:
- How much deposit you have: With a CCJ, you may need to put down more deposit. The exact amount will vary depending on the age, amount, number of judgments you have and whether they have been satisfied, but it can range from 15-35%.
- Age: Specialist advice might be needed if you will be aged between 75 and 85 years old, either during or at the beginning of the mortgage term, as some lenders will likely be concerned about your ability to make your repayments after retirement.
- Property type: If the home you are buying has any instances of non-standard construction - such as a thatched roof or steel frame - this can add to the overall risk the lender is taking on, but there are specialist mortgage providers for this scenario.
The criteria above was sourced from Criteria Brain and Knowledge Bank.
How to get a mortgage with a CCJ
Follow these quick and easy steps to start your mortgage application the right way.
Download your credit reports: You should review what information the credit reference agencies are displaying about your CCJ and wider credit situation. Make sure it’s fully accurate and up to date, and be sure to challenge the agencies if it isn’t. Head to Checkmyfile to access a trial and download your reports for free.
Get your paperwork ready: Having the right documents in order can save time when it comes to full application. You’ll need proof of address, ID and three months’ bank statements. If your CCJ has been satisfied, you will have received a letter to confirm this, and your mortgage lender may request to see it during their checks.
Speak to a mortgage broker: A whole-of-market mortgage broker can tip the odds in your favour and offset the risk posed by your CCJ. There are brokers at Teito who specialise in bad credit, and their knowledge, experience and lender contacts can significantly boost your chances of securing the mortgage you need.
Ready to get started? Make an enquiry with us to kick things off with a free, no-obligation chat.
How long should you wait to apply?
There’s no reason you shouldn’t speak to a mortgage broker to find out what your options are even when your CCJ remains unsatisfied. There could be lenders available; but the best rates and deals should gradually become accessible 1-3 years after the issue has been satisfied.
Available mortgage lenders
Below you will find examples of mortgage lenders who consider applications from borrowers with CCJs, along with some of the specific criteria you may encounter:
- Halifax: Will consider applicants with CCJs but will use credit scoring when making their final lending decision and may request additional background details.
- Pepper Money: Will consider your application and has no upper limit on the number of CCJs you can have or their value, as long as the judgments were over three years ago.
- Natwest: Can potentially ignore any CCJs that were registered 36 months ago, but their final lending decision will be subject to credit scoring.
- Bluestone: Will lend to borrowers with multiple CCJs, as long as no more than three were registered in the last three years and none were in the last six months. Any CCJs under the value of £300 or related to a mobile phone contract will be disregarded.
Compare the latest interest rates
Interest rates on bad credit mortgages are usually higher than they are for borrowers with clean credit. On average, they can be anywhere between half a percentage point and two full percentage points higher. But the good news is that the right mortgage broker may be able to secure you a lower rate than this, especially if you have extra deposit to put down.
You can compare the latest mortgage rates available to you for free on Teito by selecting the 'Choose your own mortgage' option below:
Compare bad credit mortgage rates for FREE
How much can you borrow
A satisfied CCJ won’t have a direct impact on your affordability. Your maximum borrowing will still be capped at 4.5 times your annual salary at most mortgage lenders, while a smaller number might use a higher income multiple than this, up to six times income in rare cases.
You may find it more difficult to access these higher income multiples as your bad credit could mean access to fewer lenders and mortgage deals.
Use our calculator below to get a rough idea of your affordability:
Why choose Teito for your mortgage needs?
If you have a county court judgment against your name, one of Teito’s bad credit mortgage brokers can boost your chances of securing the mortgage you need.
With whole-of-market knowledge and working relationships with specialist lenders, our five-star-rated advisors can help you access a wider range of deals, including exclusive, broker-only offers that aren’t available directly from mortgage lenders.
Here are some of the other benefits of choosing Teito:
- Our advisors are experts in bad credit, including CCJs
- You can compare rates and quotes online for free
- Our mortgage brokers are five-star rated
- We can help you secure an agreement in principle in minutes
Ready to get started with a bad credit mortgage specialist? Make an enquiry online to set up a free, no-obligation chat with an expert broker today
FAQs
Yes. Having a county court judgment won’t stop you getting a buy-to-let mortgage in the same way it won’t necessarily stop you getting a residential mortgage. The lender will take many of the same factors into account when assessing your creditworthiness, though keep in mind that interest rates and deposit requirements can be even higher in this market.
Your chances of approval might also be higher if you have previous landlord experience.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.