Judgment

What is a judgment?

Debt judgments relate to court proceedings held by a magistrate in which a person owes a debt to another party. For example if you have a mortgage and your reapyments are not made on time and in full, then you are in default under the loan contract. When this happens, the lender has the right to take you to court to recover the money you owe.

It is important to know how a judgment will affect your application for a mortgage so that when you go to apply, you have a higher chance of getting your loan approved by the banks.The key points that you should know about judgments are:

  • Judgments are put on your credit file when an order made by a magistrate for you to pay a debt has not been made.
  • A judgment will remain on your credit file for 5 years.

Please enquire online anf one of our specialist mortgage brokers can determine which lender will approve your loan according to your situation.

How do lenders view court judgments?

Credit providers are very concerned when they can see a court judgment on your credit file as it is gives them an indication that you have been in financial trouble. So how do lenders view court judments when assessing a loan?

  • Shows that the person was unable to come to a suitable agreement with the creditor without resorting to legal action.
  • Shows that there has been legal action which raises the possibility that there may be other legal action going on.
  • This is overall a very high risk, and will affect your credit score.

Paid or unpaid judgment?

Judgments are worse than defaults as they are court orders ordering you to pay a debt you have breached the terms on and they stay on your credit file for 5 years whether the default has been paid or unpaid. However it is still better if you pay out the debt so that the judgment can appear as “paid” on your credit file rather than remaining as “unpaid”.

Can I get a loan if I have a judgment?

Most prime lenders will not lend to a person who has a judgment, however you may still be able to get a loan with a specialist lender. They will ask for an explanation behind the judgment and will consider your reason when determining whether you should be eligible for a mortgage or not.

Please enquire online and find out if you can qualify for a home loan.