Is It Possible To Get A Buy To Let Mortgage With a CCJ?

December 31, 2022

A buy to let (BTL) mortgage is a product specifically for those who want to purchase a property and let it out to a third party. They are a popular product, either to earn a supplementary rental income, or as a way of building up a property portfolio and operating as a professional landlord.

If you have an issue with your credit history such as a County Court Judgement (CCJ), it is still possible that certain lenders will offer you a BTL mortgage. However, to secure a good interest rate, most lenders will ask for a higher than usual deposit, typically 25% of the overall value of the property.

It’s worth talking to specialist CCJ mortgage brokers for individual advice, because there is a lot of variation as to the specific circumstances of the case.

It’s not unusual to have minor blips in your credit score, for one or two missed or late payments. Most lenders won’t be overly concerned about these, especially if they occurred a few years ago (adverse credit incidents stay on your file for six years).

The type of payment is taken into consideration as well, with mortgages considered the most important, and phone or broadband contracts classed as least severe. Next in line of credit history severity is mortgage arrears, where a payment has been missed or not made in full for more than one month.

If the arrears are not met in full after a period of three to six months, the creditor will usually issue a notice of default. This is a formal letter warning that the outstanding amount must be repaid in full within 14 days. If the conditions are not met, the lender may take a number of actions, including court action or passing the file to a debt collection agency.

If the case goes to court the outcome may be a County Court Judgement (CCJ) to request that the amount is repaid in full. CCJs will stay on your credit record for six years. They are regarded as a serious issue by lenders because of the number of steps needed to reach this stage in the debt recovery process–it’s a last resort action.

Some lenders will take into account the amount of money involved, with less than £500 viewed as less serious than above this figure. They may also take into account how long ago the CJJ occurred, and the nature of the debt. If it was mortgage arrears for example, this will be more damaging to the prospects of getting a BTL mortgage than a parking fine.

If there is only one CCJ on a credit file and the amount was subsequently repaid in full, then you will have a wider choice of lenders than if there are multiple CCJs, and/or they were not repaid in full or at all.

In summary, there are specialist lenders who will offer BTL mortgages even if you have a CCJ. The number of lenders who will consider your application is affected by the type and amount of debt involved, the amount, and how long ago it occurred.

Your home may be repossessed if you do not keep up with your mortgage repayments

Back to Blog
;window._klOnsite = window._klOnsite || []; window._klOnsite.push(['openForm', 'R6NsLH']);