We make a lot of posts about Defaults and CCJs but we have never really made one specifically on Satisfied Defaults and CCJs and whether or not that makes a difference when applying for a Mortgage.
Like many things in the Mortgage Industry there is no set answer. We work in a competitive market with many Mortgage lenders (well over 80 at the last count) all of which have their own criteria and credit scoring methods.
Can I get a Mortgage with satisfied Defaults?
There are lenders who do not mind how many Defaults you have or whether they have been paid off. Their biggest concern is how old the Defaults are. This is great for people with multiple defaults not satisfied, but typically their rates are going to be a little above the high street.
For those of you with satisfied defaults, it can improve your chances of acceptance. Some lenders have black and white criteria in that some or all of the defaults will need to have been satisfied but some also have set criteria in that they need to have been satisfied within x months of the Default being issued or x months before you apply for a Mortgage. The lenders view on this is that they do not want you to satisfy them just to get a Mortgage.
Can I get a Mortgage with Satisfied CCJs?
Generally speaking CCJs are treated in a similar way to Defaults. However some lenders do take CCJs a little more seriously than they would a Default. Below is a copy of some criteria from a lenders website so you can see how their view on CCJs and Defaults differs:
All CCJs must be satisfied
0 registered in the last 36 months
DefaultsAccord Criteria as of 02/01/2020
1 default registered within the last 36 months with a maximum value of £500 is
I thought the above was a good example as it shows that satisfying adverse can make a difference. It is also interesting to see the CCJs must be satisfied but there is no requirement for Defaults to be satisfied with the same lender.
When looking to get a Mortgage with satisfied Defaults or CCJs the high street lenders with normal rates who credit score typically need you to fit criteria and pass their scoring when making an application. Mortgage lenders do not release their method of scoring applications but it is generally accepted that if you have 2 identical applicants and applications where the only difference is the Default/CCJ being satisfied, that that application will score higher and so is more likely to be accepted.
However, we also need to be realistic, if you have 10 defaults for say £500 each that is £5,000. Satisfying them a week before applying for a Mortgage is unlikely to make a huge difference in being accepted and so you could find it is actually better putting that money towards the deposit.
As Mortgage Brokers we work for our customers, not for the lender. We are not here to judge on whether or not you have bad credit and whether or not the Defaults & CCJs have been satisfied, our job is to work with what we have and find you the best option going forward.
If you have Satisfied or Unsatisfied credit issues or if you are wondering whether or not you should satisfy the adverse or put it towards your deposit instead, lets have a chat and we can decide which is likely to be the best route forward.