Mortgage with CCJs

WannabeNigella

Hello, thank you for accepting me.

I have a complex situation that I need help with desperately! I separated from my husband in 2015 and I was awarded all of the equity in the marital home (around £120,000) and the court order stated that he must pay the mortgage payments until July when I take over the deeds and mortgage. However, my ex never put me on the deeds 🙄 

I am now due to take on the mortgage myself so started doing some groundwork. I thought I'd better do a credit check on myself and I was horrified to find two CCJs on my file. I panicked and paid them off in full today. However, because of this, my rating is very poor, although I'm showing as low risk on every other category. Now I am scared to look for mortgages. I only need to borrow 80k and I have the gifted equity as security against the loan. I am borrowing with my new partner who has a decent rating. We are both in steady jobs, no loans outstanding and our monthly outgoings are relatively low.

I don't know where to begin...

[Deleted User]

You begin by using a decent broker, who will advise where to best place your mortgage, or if you need to wait for the CCJs to lose their impact.  The large deposit will help.

How old are the CCJs?

Fighter1986

If the CCJs are settled and 3+ years old they won't have a huge effect on your being to obtain a mortgage; as long as the rest of your profile is good (no debt elsewhere, good size deposit, stable job with income plenty sufficient to cover the mortgage you'll be looking to take out).

Speak to a good all of market broker - find one who doesn't charge you fees - about your situation and the age of the CCJs, they'll match you with a lender. I probably shouldn't suggest a specific broker here but London and Country have been around for a long time, they're experienced. 

WannabeNigella

Thanks so much both of you. 

One CCJ was from Feb 2017 and one from January 2018. Both for relatively small amounts too. All of my debts are paid off and I don't owe anyone anything! 

Fighter1986

You may find a lot more lenders open up to you after January 2021, as CCJs within the last three years is a big risk factor. No adverse in the last three years reduces your risk to lenders. 

[Deleted User]

I assume "relatively small" is under £500?

If CCJs are over £500 within 3 years (so if your latest one is more than £500) then you're automatically deemed credit impaired (as per FCA/MCOB), which will make it a hell of a lot harder. Not impossible, but certainly harder.

I think you'll need to talk to a broker to explore your options, but if the most recent CCJ is less than £500 it doesn't sound like it'll be too hard. Worst case scenario I'd say a few years at a higher rate - but then once your fix ends, you'd remortgage elsewhere back to normal rates.

Be aware that Covid-19 has caused criteria to get a bit stricter, but you're now over 24 months away from adverse (assuming rest of your files are clear) which is a positive

Above is of course assuming that you have a combined income high enough to afford £80k mortgage - but if there's 2 earners on the case that's only going to be approx £20k (if that) between you, if you have no debt/dependants.