Mortgage Deposits with CCJ
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Mortgage Deposits with CCJ
Lewis Shaw talks to us about deposits and County Court Judgements (CCJs).
How Much Deposit Do I Need for a Mortgage with a CCJ?
It really boils down to the specifics of your situation. Lenders will look at several key factors:
- How many CCJs do you have?
- Are they satisfied (paid off)?
- When were they registered?
- What was the amount of each CCJ?
- What type of debt led to the CCJ (e.g., a mobile phone contract, personal loan, credit card)?
This information helps lenders assess the risk and decide on the deposit required.
Generally, having a CCJ means you might need a slightly larger deposit than someone with a clean credit history. Lenders want to feel confident they’ll get their money back, and a larger deposit reduces their risk.
If your CCJ was registered three or more years ago, has been fully repaid, and was for £500 or less, you might still qualify for a mortgage with just a 5% deposit. However, this isn’t guaranteed and depends entirely on a full assessment of your circumstances.
For a more recent CCJ, especially one that hasn’t been satisfied, you’ll likely need a deposit of at least 10%, potentially increasing to 15% or even 20%. The good news? Many lenders are willing to consider applicants with CCJs – it just depends on the details.
Is a 5% Deposit Mortgage Possible with a CCJ? And How Old Does the CCJ Need to Be?
Yes, some lenders will consider you for a mortgage even if you only have a 5% deposit and a past CCJ.
Ideally, for a lower deposit, like 5%, the CCJ should be more than three years old. Interestingly, if the CCJ was for a small amount related to something minor, like a mobile phone contract, some lenders may even disregard it completely.
The crucial factors remain the amount and registration date of the CCJ. Importantly, the CCJ must have been satisfied (paid in full) for a chance at a 5% deposit mortgage.
Which Lenders Offer Mortgages with a CCJ? How will lenders view my application if I have a CCJ?
You might be surprised! The vast majority of mortgage lenders, including potentially one or two high street banks and many specialist lenders, have policies allowing them to lend to people with CCJs. You still may have options.
How lenders view your application depends entirely on your unique circumstances. They’ll look at the whole picture:
- Your deposit amount.
- The CCJ details (age, amount, whether it’s satisfied).
- Your overall credit report (are there other issues like late payments or defaults?).
- Your income and job stability, along with your outgoings and affordability.
A small, old CCJ from a forgotten parking ticket or phone bill is unlikely to cause major concern, especially if you have a decent deposit (10% or more). Don’t let a minor past issue put you off exploring your options.
However, if you have multiple CCJs, large amounts, or very recent CCJs, we might need to approach more specialist lenders who are comfortable with higher risk. This often means slightly higher interest rates and potentially more paperwork, but a mortgage can still be achievable.
Having a CCJ doesn’t automatically mean ‘no mortgage’. It just means we might need to dig a bit deeper to find the lender that’s the right fit for you.
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Is it better to wait until my CCJ has been satisfied before saving a deposit for a mortgage?
Generally, yes. Paying off (‘satisfying’) the CCJ is almost always the best first step before applying for a mortgage.
Once the CCJ is settled, your credit profile can begin to recover. The more time that passes between satisfying the CCJ and applying for your mortgage, the better your chances usually are, and you might secure more favourable interest rates.
Of course, life isn’t always that simple. If the CCJ is very large and paying it off will take several years, but you need or want to buy a home sooner, waiting might not be feasible. The best approach depends on your situation, so talking it through is important.
How Can I Improve My Chances of Getting a Low Deposit Mortgage with a CCJ?
If you have a CCJ and are aiming for a mortgage with a smaller deposit, here are some practical steps you can take:
- Satisfy the CCJ: This is the most crucial step. Get it paid off.
- Check Your Credit Reports: Review your files with all three main UK agencies (Experian, Equifax, TransUnion). Look for errors and understand exactly what lenders will see. Address any other issues like defaults or late payments if possible.
- Register to Vote: Ensure you’re listed on the electoral roll at your current address. This is vital for identity and address verification and positively impacts your creditworthiness.
- Tidy Up Your Admin: Make sure all your financial accounts (bank accounts, credit cards, loans) are registered to your current, correct address. Consistency builds lender confidence.
- Maintain Payments: Keep up-to-date with all your current credit commitments without fail.
- Keep Saving: Demonstrating a consistent saving habit is always viewed positively.
Taking these steps shows lenders you’re financially responsible, making them more likely to approve your application, even with a past CCJ and a lower deposit.
How can a mortgage broker help me if I’ve had a CCJ?
We’ve helped many people navigate the mortgage process with CCJs. Sometimes, people feel anxious or embarrassed about disclosing past financial difficulties. Please don’t – there’s no need.
As professional advisors, we’re here to help, not to judge. We understand that life throws curveballs. More practically, using an experienced broker offers many advantages:
- Expert Knowledge: We know the specific lending criteria for a wide range of lenders, including those who specialise in people with CCJs or other ‘bad credit’ markers.
- Wider Access: We often have access to mortgage deals and lenders that are not available directly to you.
- Experience: Brokers used to dealing with CCJs know how best to present your application to potential lenders.
- Saves You Time & Stress: We do the research and legwork to find suitable options, significantly increasing your chances of getting approved.
You need someone who handles these situations day in and day out. That doesn’t necessarily have to be us, but we hope you’ll consider it. We have extensive experience and likely more options than you realise. Get in touch for a no-obligation chat to explore what’s possible for you.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
