Mortgage and CCJ

Suseka97

Am not sure if this is the correct place for this question - but here goes.

I'm trying to help out a member of my family who is wanting to move house, but she has a CCJ.  She's had a mortgage with the Nationwide for 7yrs, but 2 1/2 years ago she ended up with a CCJ which she has been paying each month with no missed payments.  She wants to move and last weekend she completed an application with NW for a DIP, but it was declined and I think it was more to do with the CCJ than anything else.  Her earnings are around £26k, has no other debts or lending (no credit cards, no loans etc.) and her outgoings are relatively minimal.  She'll have about £70k in equity when she sells her current property, but of course will need to keep money back for the legal fees, moving, agents fess etc.  She really wanted to get a sense of what she can borrow, but has been looking at properties between the £150k and £170k.

She obviously doesn't want to keep trying online with different lenders, so I'm thinking she needs to go with a mortgage broker who has experience of working with clients who has a CCJ on their credit file.  

Does this sounds sensible?  Any advice on how she should proceed?  She could clear the CCJ with her equity if needs be (I think it's around the £2k mark now).

ACG

We do a lot of adverse and to be honest, this sounds pretty minor. It will likely be the issue for nationwide but it doesnt mean it will be for all lenders. 

Under 3 years and the CCJ is classed as recent so it might cause a bit of a problem with a lot of lenders (high street lenders). But it should be easy to overcome, its more a case of what the rates will look like and that will depend on the size of the CCJ etc. But I reckon with her deposit something under 5% should be possible. 

I dont think she needs an experience in adverse broker, I think any experienced broker should be able to help. 

Hoenir

If your family member can afford to upsize. Then repaying the CCJ quicker would be the optimal solution. Lenders are wise to borrowers that treat debts as interest free loans. Generally as it reflects a broader attitude to personal financial management. Which forms part of the risk profiling undertaken during the application stage. 

Always be specialist lenders that will happily take the risk at the expense of a higher rate of interest as compensation. 

Hoenir

Lenders policies are set at the macro level not the micro. They've no interest in the detail. Be too expensive and time consuming to vet individual mortgage applications if they did. Applicants need to jump all the hurdles otherwise it's a flat decline.