CCJs And Mortgages - The Basics
A CCJ (County Court Judgement) can have an adverse effect on the ease of obtaining a mortgage or any other type of financing. When a mortgage application is submitted, the provider considers the whole financial background, including any judgments that have been made against the applicant. Of all of the negative aspects that can be revealed as part of a credit search, CCJs are highly detrimental to the availability of mortgage financing. In fact, most high street banks will not offer mortgages to those with CCJs.
How do CCJs Happen
A CCJ is the result of a longer process. Initially, a creditor who has failed to receive any monies owing will issue a County Claim Form (also referred to as a Summons) stating that they intend to take court action in order to claim the money that is owing to them. At this point, you will have the option of declaring to the court that you agree that you do, in fact, owe the money or denying that the debt exists.
If the debt is owed, you need to fill in an expenses and income form which will allow the court to calculate a repayment plan that will not leave you in substantial hardship. From this, the court will then write to you informing you of your payment plan. This judgment is known as a CCJ.
If you deny that the debt is owed, the court will request further information and will then decide whether the money is owed or not. If it is decided that the money is owed, a payment plan will be determined and a CCJ issued.
What Impact Does a CCJ Have on a Mortgage
A CCJ will have a negative impact on any credit rating to the extent that many high street banks will not offer financing to individuals with a CCJ. However, if a CCJ is being paid and has not been defaulted on for some time, it may be possible to obtain a standard mortgage, albeit at a higher interest rate.
There are, of course, many mortgage companies that will offer mortgages to those who have CCJs or other financial difficulties. Whilst this is good news for people with CCJs, it is important to realise that such specialist companies are unlikely to offer the same favourable rates as some of the high street banks. Nevertheless, if you have CCJs it is still worth considering approaching high street banks, initially, before referring to a specialist mortgage provider in order to ensure that you get the best possible rate and terms for your situation.
A CCJ is a court judgment which a creditor requests as a result of a debt that has not been met;
initially, a CCJ starts with a summons or claim form; from this a payment plan is established, this is known as a CCJ;
having a CCJ may mean that you are unable to obtain a mortgage from a high street bank, although there are specialist companies that can assist.
Be sure to calculate your costs before hand using a tool such as our free mortgage calculator