For many people in the UK, the dream of homeownership is brought closer by the government’s Right to Buy scheme, which allows eligible council and housing association tenants to purchase their homes at a discount. However, securing a mortgage can become complicated if you have a County Court Judgment (CCJ) on your credit file. In this guide, we’ll explore how having a CCJ might affect your ability to get a mortgage under the Right to Buy scheme, and what you can do to improve your chances.
The Right to Buy scheme gives long-term council tenants in England the opportunity to purchase their home at a discounted price. The size of the discount depends on factors like the type of property and how long you’ve been a tenant.
The scheme is an attractive route for many people who may not otherwise be able to afford a home. However, if you have a CCJ, the process can be more challenging.
A County Court Judgment (CCJ) is issued when someone takes legal action against you for unpaid debts, and the court orders you to repay them. A CCJ stays on your credit report for six years, even if you pay it off, and can severely impact your credit score.
When you apply for a mortgage, lenders review your credit history. A CCJ often raises red flags for lenders because it indicates a history of financial difficulty. This can lead to higher interest rates or outright rejection of your mortgage application.
Discover mortgage options and how the Right to Buy scheme can work for you.
Contact us nowYes, it is possible to get a CCJ mortgage, but it will likely require a more strategic approach and possibly working with a specialist lender. Here are the key factors lenders consider:
If the CCJ is older than two or three years, some lenders may be more lenient.
Settled CCJs (where the debt has been repaid) are viewed more favourably than unsettled ones.
A larger deposit (e.g., 15-20%) can make you a lower-risk borrower in the eyes of lenders.
Lenders will carefully assess your income, outgoings, and overall affordability.
Specialist mortgage lenders in the UK cater specifically to people with adverse credit, including those with CCJs, and may offer tailored products for Right to Buy applicants.
If you’re looking to secure a Right to Buy mortgage with a CCJ, here are some actionable steps:
Before anything else, ensure you meet the criteria for the Right to Buy scheme. You can do this by consulting your local council or using the government’s online eligibility checker.
Request a copy of your credit report from UK agencies like Experian, Equifax, or TransUnion. Check for any errors and make sure the CCJ is accurately recorded.
If your CCJ is unsettled, pay it off if possible. A satisfied CCJ is far less concerning to lenders.
A bigger deposit reduces the risk for the lender and may improve your chances of approval.
A specialist mortgage broker can connect you with lenders who are open to Right to Buy applicants with CCJs. Brokers have access to niche products that may not be available to the general public.
If you have a family member or close friend willing to act as a guarantor, this can strengthen your application.
Consistent payments on bills, reducing debt, and avoiding new credit can demonstrate financial responsibility to potential lenders.
High street lenders may not be willing to take on the risk of a CCJ mortgage, but specialist lenders cater to applicants with poor credit histories. These lenders assess each case individually and may overlook past financial issues if you meet other criteria.
It’s worth noting that interest rates from specialist lenders are typically higher than standard mortgages, so shop around and compare offers to find the best deal.
Despite the challenges, combining the Right to Buy scheme with a CCJ mortgage has its advantages:
Getting a CCJ mortgage under the Right to Buy scheme may seem daunting, but it’s far from impossible. With careful preparation, professional advice, and a proactive approach, you can overcome credit challenges and achieve homeownership. Whether through paying off debts, saving for a larger deposit, or working with a specialist broker, there are paths to success even with a CCJ on your record.
By leveraging the benefits of the Right to Buy scheme and exploring all your mortgage options, you can take a major step toward owning your dream home in the UK.
Yes, you can still apply for a Right to Buy mortgage even if you have a CCJ. However, your options may be limited, and you’ll likely need to work with a specialist lender. Having a larger deposit, settling your CCJ, and demonstrating financial stability can improve your chances.
No, a CCJ doesn’t automatically disqualify you from getting a mortgage. While many high-street lenders may decline your application, there are specialist lenders who consider applicants with adverse credit, including CCJs.
Yes, your Right to Buy discount can help reduce the amount you need to borrow, which in turn makes you a less risky applicant for lenders. A lower loan-to-value ratio can increase your chances of mortgage approval.
While it’s not always required, settling your CCJ can significantly improve your chances of getting approved. Many lenders prefer to see that you’ve resolved your debt, as it demonstrates responsibility and reduces perceived risk.
To improve your credit score:
The deposit size can vary based on the lender and the severity of your credit history. Typically, a larger deposit of 15-20% of the property value can improve your chances of approval. However, the Right to Buy discount may reduce the amount you need to save.
Yes, there are specialist lenders in the UK that offer mortgages to applicants with CCJs. These lenders focus on understanding individual circumstances rather than just relying on credit scores.
The older the CCJ, the less impact it may have on your mortgage application. Many lenders are more lenient with CCJs that are over two or three years old, especially if they have been settled.
Yes, having a guarantor with a strong credit profile can strengthen your application. A guarantor agrees to cover your repayments if you’re unable to, which reduces the risk for the lender.
You’ll typically need:
Yes, interest rates are generally higher for CCJ mortgages because they represent a higher risk to the lender. Comparing different lenders and working with a mortgage broker can help you find the most competitive rates.
Yes, once your credit score improves and your CCJ is removed from your credit file (after six years), you may be able to remortgage with a high-street lender at better rates.
Absolutely. A mortgage broker can guide you through the complexities of applying for a mortgage with a CCJ and connect you with specialist lenders that cater to adverse credit applicants.
Yes, you can apply for a joint mortgage, but the lender will assess the credit profiles of both applicants. Having one person with a good credit score may improve your chances, but the CCJ will still be considered.
If your application is declined, consider:
It’s also essential to understand why your application was declined so you can address the issues before trying again.
