Can I still get a mortgage with a CCJ or default?

The short answer is YES, however there are lots of factors that will determine the level of deposit required to support your mortgage application, and the interest rate you will be charged by the bank or lender that makes them feel comfortable against the risk.

The main things to consider are as follows:

A specialist lender, who will likely charge a higher interest rate, will ignore a CCJ and defaults that have been registered for over 36 months (3 years) even if they have not been satisfied.

The older the CCJ or default, the more lenders you will have available to apply for a mortgage with. 

High Street lenders (like building society’s and banks) will give lower interest if the CCJ or default been satisfied (repaid) for over 36 months. 

How much does a CCJ affect my credit score? On average a borrower’s credit score can go up by as much as 200 points by satisfying a CCJ or default.

The amount the CCJ or default that was recorded against you and the higher the balance will reduce the number of lenders that will consider your application unless they have been satisfied for 36 months. The tolerance that most mainstream lenders will have generally ranges between £250 to £500. If you have a CCJ or default that is more than this, it doesn’t mean a mortgage is not possible. However, it is likely that you will need a larger deposit and can expect to pay higher interest rates.

How many CCJ’s can you have? It doesn’t matter however, the number of CCJ’s or defaults that have been recorded against you will reduce the number of lenders that will consider your mortgage, especially if they are all recorded against you within the last 36 months. 

Lenders will all have their own unique criteria around CCJ’s and defaults and will also have different tolerance levels around the number that they will consider recorded against you. The more CCJ’s and defaults that you have had recorded against you, especially within the past 36 months, will directly affect the amount of deposit you will likely have to put down to support your mortgage application and the interest rate which will be made available to you.

The type of CCJ that has been recorded against you will also determine which lenders can consider your application. For example, if you have just one CCJ for a parking offence then it would be looked upon differently then if you had a CCJ recorded against you for not paying a financial commitment such as credit cards, hire purchases or personal loans.

Just like with CCJ’s the type of default that has been recorded against you will be viewed differently by lenders. For example, defaults for communication (mobile phones & broadband) and utility (household bills such as gas, electricity and water) will be viewed differently to defaults that have been recorded against you for credit card, personal loan & car hire purchase agreements.

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