Mortgage & CCJ

sterow

New to this forum, sorry if there a threads about the same topic.

Me and my partner are looking to purchase out first property, her credit file is a1 however i have an outstanding CCJ registered for around 22k in November 2012 (now around 15k).
We both earn around 30k a year and looking borrow max 175k with deposit upto 40k. Ideally we would like to start looking now, however we have a couple of options available and we would like some advice

Firstly would we be able to get a mortgage currently and on a good rate?
Are we best clearing the CCJ then applying, however it is still on my record
Or do we wait till 2019 after the CCJ has completed it 6 year term?

Any advice would be much appreciated

Regards

Steve

ACG

You will have options and at decent enough rates, but unlikely to be on the high street.

One ofr a broker I think due to the lenders available.

sterow

Thanks for the reply.

I am taking it the lower the ltv the better,, But would 85% ltv be ok?

Thrugelmir

You have a £40k deposit but an unsettled CCJ from 2012. Doesn't reflect well on you as a potential borrower from the lenders perspective.

Geoff1963

Does the CCJ give a repayment schedule ? If not, is there a risk that having bought your new house, the creditor could demand it is sold, so as to get the deposit off you ? I presume that a CCJ normally demands immediate payment, with an exception for limited means.

fatbelly

Charging Order is a possibility, whether or not payments are being made.

An order for sale could be tried but would be unlikely to succeed.

ACG

I think you would likely need a 15% deposit. There is potentially a lender who would look at it with a 10% deposit, but the lender keeps dipping their toe in and out of 90% LTV so I dont think I woudl rely on that too much.

sterow

I have been in contact with a broker who advises with a 15% deposit it is worth trying the halifax first. But worried that we would have no chance .

Would there be any harm in trying for an AIP, as i am led to believe they only do a soft credit search?

Anyone in a similar position had any joy with the Halifax with a CCJ?

CCJ registered November 2012

chelseablue

My partner had a default on his file and we were accepted by Halifax, but is a CCJ considered 'worse' than a default?

His default was dated 2011 and the mortgage was approved in 2015, so was 4 years old

tifo

If you've got an active CCJ its unlikely you'll get a mortgage on a good rate within the current strict criteria.

If the CCJ is from Nov 2012 it will come off in Nov 2018. Better to try after that.

"You have a £40k deposit but an unsettled CCJ from 2012. Doesn't reflect well on you as a potential borrower from the lenders perspective".

Once a CCJ is on your credit file it makes little difference to most lenders whether it is active or (partial/full) settled. Thus it makes no sense paying it off as it will stay on for 6 years anyway. Unless of course you really care for the people/firm who got the CCJ on you and want to pay them back in full out of moral duty.

Thrugelmir

tifo wrote: »

If the CCJ is from Nov 2012 it will come off in Nov 2018. Better to try after that.

The debt will still need to be declared on the application form.

Thus it makes no sense paying it off as it will stay on for 6 years anyway. Unless of course you really care for the people/firm who got the CCJ on you and want to pay them back in full out of moral duty.

Then people wonder why a lender won't advance them £'000's as a mortgage. Lenders are fully aware that people default on debts. Then in essence use this an excuse to repay slowly and build savings. Using the debt as an interest free loan. Hence why I used the word "reflects". As lenders choose their customers carefully by profiling. With profiling it's possible to categorise the potential borrower. They've more than enough demand to lend without taking any due risk.