Self-Employed Mortgage with CCJ

Will I need a larger deposit if I’m self-employed with a CCJ?

Yes, you’ll often need a larger deposit if you’re self-employed with a CCJ, but how much larger depends on the size of the CCJ, whether it’s been paid, when it was registered and the rest of your credit profile.

When lenders do a credit search, they look at your conduct over the past six years. If it’s a very small CCJ that was paid off five or six years ago, they’re probably not going to be too worried about it.

If it’s for £5,000, happened in the last 12 months and hasn’t been repaid, that’s going to require a completely different lender and a bigger deposit. The deposit required is broadly proportional to the CCJ: the smaller and older the CCJ, the smaller the deposit you’ll likely need. The bigger and more recent it is, the bigger the deposit required.

Does the date of my CCJ matter for a mortgage if I’m self-employed?

Yes. The date of your CCJ is one of the most significant factors. The longer ago it was registered, the easier it is to get approved, the lower your deposit needs to be, and the better interest rate you’ll likely get.

It’s not just the registration date that matters either. For some lenders, the satisfaction date is equally important. Some lending policies work from the date the CCJ was registered, while others work from the date it was paid off. These can be very different dates, and which one a lender uses can make or break an application.

Does the size of the CCJ affect my mortgage application as someone who is self-employed?

Yes. The size of the CCJ directly affects your mortgage options.

For CCJs of £500 and below, most high street lenders have a policy that can accommodate them, depending on what the CCJ was for and when it was registered. Once a CCJ exceeds £1,000, a different set of lending criteria typically apply, which usually means specialist lenders, higher deposits and higher interest rates.

A larger CCJ makes it harder to get a mortgage approved, but it’s not impossible. It may just mean you need a bigger deposit or pay a higher rate for a period of time.

The important thing to understand is that a CCJ resolves itself over time, particularly once you repay the debt. It’s not going to blight your mortgage for the next 25 years. As long as you keep your nose clean after the CCJ is repaid, we can hopefully remortgage you to a more mainstream lender in a couple of years’ time.

How do I apply for a mortgage as someone who is self-employed with a CCJ?

You apply in essentially the same way as anyone else. We’d ask for your ID, proof of address, bank statements, SA302 tax calculations and tax year overviews. We may also request the SA100. Normally we need those records for the past two to three years.

We then go through a Fact Find, which is a detailed questionnaire to assess your circumstances. We’ll talk about how much deposit you have, how long you’ve been self-employed and your income over the past two to three years.

Then we look at the CCJ: when it was registered, how much it was for, and your overall credit profile. We ask about any other outstanding credit commitments and your household makeup, whether it’s just yourself or a partner, or if you have children.

Based on all that information we make a recommendation on the right lender and mortgage term that will be affordable. Don’t worry about it. Just provide all the documentation to your adviser and be guided by them. It’s our job to help you.

Can you remortgage if you are self-employed and have a CCJ?

Yes, you can remortgage if you’re self-employed and have a CCJ, but it depends on a few factors. Again, it comes down to when the CCJ was registered, how much it was for and whether it’s been repaid.

For a remortgage, the key additional factor is how much equity you have in your existing property. If you don’t have much equity at all, that may be a challenge. But if you have 20% or more, it’s normally doable.

There are more moving parts with remortgages when there’s adverse credit in the background, and it may be that you don’t actually need to remortgage at all. We might be able to arrange a product transfer with your existing lender, which means switching to a new deal without a full application. That’s obviously to be determined based on your individual circumstances.

You can remortgage if you’re self-employed and have a CCJ, but we need to understand the terms of that CCJ, why it occurred, and what your income looks like.

How can a mortgage broker help a self-employed person with a CCJ?

If you’re self-employed with a CCJ and looking to get a mortgage, the best thing to do is speak to a broker you like and trust who has experience with your situation. Be guided by them, provide all the documentation they request and then let them do their job.

It can feel unnerving when you’re self-employed and you have a CCJ. You’ve already got the worries of self-employment and fluctuating income. When you combine that with a CCJ, you might feel as though the mortgage market is against you, but it isn’t.

You just need to find the right mortgage adviser. We’ll help you get that mortgage and hopefully get you into a new home. Get in touch to discuss your options or call us on 01623 375007.

Key Takeaways

• Getting a mortgage while self-employed with a CCJ is possible, but lenders view this as “risk layering” due to the combination of fluctuating income and adverse credit.
• Approval depends on when the CCJ was registered, its value, whether it has been satisfied, and the size of your deposit.
• CCJs fall off your credit file after six years, but you should always declare past CCJs to your mortgage broker as lenders may still ask about them.
• CCJs under £500 can often be accommodated by high street lenders. Above £1,000, specialist lending criteria typically apply.
• Larger, more recent, or multiple CCJs will require a bigger deposit and may result in a higher interest rate for an initial period.
• Required documentation generally includes ID, proof of address, bank statements, and tax records (typically the most recent two years’ SA302 tax calculations, tax year overviews, and potentially the SA100).
• Remortgaging is also possible with a CCJ, provided you have sufficient equity (ideally 20% or more).

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

SOME BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.