When you owe money to a company or default on a loan, your creditor can apply to the County Court for a judgement to reclaim the money you owe. The court will decide whether there really is a debt to pay. If there is, they will issue a county Court Judgement (CCJ) which sets out how the debt should be repaid.
Defaults or CCJs on a credit file are one of the most common reasons why a mortgage applications are declined, particularly on the high street where lenders generally only grant mortgages to applicants with a clean credit rating. However, getting a mortgage with defaults or CCJs is still possible, as long as you work with a specialist lender or advisor.
How can you find a mortgage with CCJs?
There are a number of specialist lenders that approve mortgages with CCJs. The market for adverse credit lending has grown in the past couple of years, and in 2015 there is more choice than ever. However, this doesn’t mean it’ll be easy to get approved. There is still plenty of work to do to try to improve your credit rating as much as you can, and it’s also highly recommended you work with a specialist adverse credit advisor who knows how to get your application accepted.
The first step towards finding a mortgage with defaults is to check your credit rating to make sure all the information on your file is accurate. An advisor will only be able to provide the help you need if they know exactly what they’re dealing with.
What deals are available?
Despite the presence of defaults or CCJs on your credit record, you may well be surprised by just how competitive the current crop of mortgage deals actually are. The Help to Buy Scheme makes it possible to lend up to 95 percent loan-to-value, even with defaults on your file. This presents an excellent opportunity to buy a property, even with adverse credit and a small deposit. However, those with recent or more severe defaults may have to raise a greater deposit.
Mortgages with satisfied CCJs
Repaying your debts will certainly improve your credit score, which in theory should make it easier to find a mortgages with satisfied CCJs. However, satisfying the CCJ is not always essential to access a mortgage, as many lenders do not actually run a credit scoring system.
Generally speaking it will be easier to be obtain a mortgage with satisfied CCJs and settled defaults. This is because lenders who do run a credit score will grade your application as a lesser ‘tier’ of risk.
Does the type of default make a difference?
In a word – yes. If you default on a mobile phone payment, that will be taken by some lenders with a pinch of salt. On the other hand, if you have mortgage defaults or defaults on a secured loan on your credit record, this is something mortgage lenders will view much more seriously.
How can we help?
Whether you’re looking for mortgages with CCJs and defaults, or satisfied CCJs, we can help. Our advisors have considerable experience as specialists in adverse credit mortgage lending, and know precisely which lender to turn to find the best deal that meets the particular circumstances of prospective borrowers.
For a free, no-obligation initial consultation with a specialist mortgage advisor, please complete our enquiry form with some details about your situation. One of mortgage advisors will be in touch shortly.