CCJ troubles hitting your remortgage?

A reader from Liverpool is trying to remortgage his property but is worried a CCJ his wife incurred may hold them back from a securing a good deal.

Peter McGahan, managing director of Worldwide Financial Planning offers a helping hand through the problem.

Peter from Liverpool asks:

My wife and I have had our mortgage for approximately seven years.

We first got a two-year fixed rate with the Halifax but when this came to an end I tried to move lenders but it came to light that my wife had overlooked a store card payment from our previous address and as they could not contact us it resulted in a CCJ being served so we ended up staying with the Halifax for a five-year fix which is now due to expire.

My question is - I wish to move lenders this time for a better deal but wondered if we would be able to move with her CCJ. She is currently paying off the debt and it has been on six years in April.

The other option we were considering was to remove her name and have it just in mine as I have a good credit rating.

Can you please advise?

Peter McGahan from Worldwide Financial Planning responds:

The size of the CCJ and also your other credit history are really important given today's difficult lending conditions. The size of the original CCJ and date it was registered is important as each lender has their own thresholds up to which they are willing to ignore it. For example some lenders will ignore CCJ's registered over 36 months ago and under £300.

Most credit searches only go back six years so a CCJ registered before that may not be visible. Because you are in an arrangement to repay your CCJ however, some creditors will register this as an active CCJ which is unsatisfied and it may be flagged. Each creditor has different debt recovery strategies.

Notwithstanding the above, I would be fairly confident that a mainstream lender would consider your application if there are justifiable reasons for the CCJ. The key is to talk and be open and fair rather than the lender having to find out themselves.

As I mentioned above, your credit history is also important as if there were other issues the lender will look at the case very differently and you may have to go to an adverse lender.

Also you could remove her name, but this will obviously incur extra legal expenses to remove her from the deeds and get her to sign a right of occupancy form.

At this point some lenders may have an issue as they can sometimes ask for any other occupants full details and credit history and the results of this could affect the lending decision.

I do not think it is necessary to go down this route as I have said above I think it will be possible to remortgage to a high street lender.

It will be useful for your wife to go and check her credit file to find out exactly what is showing against her and this would enable us to make a more definitive decision.

If you have a question for John or one of our team of experts go to the myfinances.co.uk Ask the Mortgage Expert section.

For more information on the adverse lender issues discussed here, go to Worldwide Financial Planning.

Worldwide Financial Planning is authorised and regulated by the Financial Services Authority (FSA).