Get a mortgage with CCJs
Some mortgage companies will not take on people with CCJs registered against them. However, some lenders are prepared to overlook CCJs from applicants if they relate to a past relationship, or a previous period of unemployment.
Some banks and building societies approach applicants with impaired credit history on a case by case basis, while a number of specialist sub prime lenders will take on prospective borrowers who have had CCJs, but charge higher interest rates for the privilege.
Some lenders offer borrowers an alternative, known as a credit repair mortgage. These work by providing borrowers a mortgage at a rate which is more expensive to begin with. Following a period of between one and three years, if the borrower has made timely repayments they will be given the opportunity to switch to a standard rate without needing to remortgage.
A CCJ is a judgment from the County Courts (in England and Wales) against an individual. CCJs are issued against an individual usually as a result of them failing to meet contractual obligations with regard to payments to a lender, firm or individual.
Many people are unaware they have a County Court Judgement (CCJ) recorded against their name until an application for a mortgage is declined and the matter comes to light. For example, a small unpaid mobile phone bill which has been overlooked, could result in a CCJ being issued against a person without them knowing because the company has been unable to trace them to arrange settlement due to a change of address.
The creditor (the person or organisation who is owed money) must have issued a default notice before being able to apply to the court for a CCJ to be issued.
CCJs on the rise
Figures from the Registry Trust, the non-profit body that monitors county court judgements, reveal 419,510 County Court Judgments (CCJs) were issued during the first half of 2016 in England and Wales, an annual increase of 13%, and the highest level for a decade. The average value of CCJs was £1,833. The economic climate is attributed to being the fundamental cause or the rise. Despite the UK enduring a milder economic downturn compared with than many other countries, there have nonetheless been some notable business closures and significant numbers of redundancies in certain parts of the country which inevitably caused some people to experience financial hardship. At a time when interest rates are at an historic low, the CCJ statistics are a stark reminder that there are still many people who have experienced a blip on their credit rating who will need the expert help of a mortgage adviser to point them in the direction of those lenders who may be able to assist.
Specialist lenders could offer salvation
Traditional lenders tend to be very skeptical about anyone who has a CCJ listed on their credit report, taking the stance it is an indication the person may prove to be an unreliable borrower. On the other hand specialist lenders adopt a slightly different viewpoint. For these lenders the door is open, they won't be spooked just because there is a CCJ listed on your credit report. Timing plays an important role, if your CCJ was issued over 3, 4 or 5 years ago you and since then you have been on the straight and narrow, your chances are more favourable than if the CCJ was issued more recently.
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