Mortgage with CCJs

Getting a mortgage with CCJs can be tough. Mainstream lenders may not consider your application if you have a CCJ on your credit file, however there are still options available to you.

How do I get a mortgage with CCJs?

As with most bad credit circumstances, you typically need a large deposit to get your application approved. With a large deposit, it means the amount you need to borrow is less, resulting in a lower LTV ratio. Therefore a lower LTV makes you a better prospect for a lender and more likely to get a better interest rate.

Due to the CCJ on your credit file, however, it’s likely you’ll only have access to higher interest rates than you would with a good credit history. This is because your interest rate is determined in line with the level of risk a lender perceives with your application. Therefore the greater the risk, the higher the interest rate.

Getting a mortgage with a CCJ

Specialist lenders will probably take a less definitive view of a CCJ and consider:

  • Is the CCJ satisfied?
  • How long ago the CCJ was
  • The amount of money the CCJ was for

A CCJ stays on your credit file for 6 years, even if it is satisfied. You should check your credit file to make sure the information is accurate. It shows whether your CCJ is satisfied or not, which could help your application.

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Why Clever Mortgages?

At Clever Mortgages we can offer you the support and advice required to ensure you get the right mortgage for your first home.  We provide access to a comprehensive range of mortgages from across the market. We are also authorised and regulated by the Financial Conduct Authority (FCA) and adhere to the Treating Customers Fairly (TCF) guidelines, so you can be confident that we will treat you with integrity and only recommend products that meet your needs.

Mortgage types

A fixed rate mortgage is where your interest rate stays the same for a set time period (usually between 2-10 years). As a result your repayments are exactly the same each month, regardless of what happens to other mortgage rates. These types of mortgages are popular with first time buyers and people looking to budget each month, especially those who have suffered from a poor credit history.

The main downside to a fixed rate mortgage is that if mortgage rates go down you can be paying a higher amount than you would on a variable rate mortgage. However, this can also go in your favour and if interest rates increase you can be paying less than you would on a variable rate.

Every lender will have their own standard variable rate (SVR), which is considered their basic mortgage. This interest rate goes up and down, usually in line with the Bank of England’s interest rates but the lender is free to raise this at any time.

This means that your monthly payments can go up or down depending on what the interest rate is at a given time. Some months you could be paying more whilst other months you could be paying much less.

A discount mortgage is when a reduction is applied to the lenders Standard Variable Rate (SVR) for a certain length of time (typically 2-3 years). Discount mortgages are attractive as they can allow you to pay slightly less than the bank's standard rate. However as the SVR can still fluctuate they are not ideal for people who are looking to stick to a strict long term budget.

A tracker mortgage is basically a type of variable rate mortgage.  What makes them different from other variable rate mortgages is that they follow – track – movements of another rate, the most common rate that is tracked is the Bank of England Base Rate.

A capped mortgage is the same as a variable rate mortgage; however the interest rate can never rise above a set “cap”. These mortgages can work well for people who can budget for different mortgage repayments each month but want the reassurance that their payments will never go above a certain amount.

Offset mortgages are linked to a savings account as well as your current account. Your savings will be 'offset' against the value of your mortgage, and you'll only pay interest on your mortgage balance minus your savings balance. These types of mortgages work well for higher earners or people who have a good amount in savings that they want to use towards paying their mortgage.

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