Not all lenders look at judgments on face value
Most prime lenders such as major banks will not lend to a person who has a judgment
However, you may still be able to get a loan with a specialist lender:
- You can borrow up to 90% of the property value.
- You must provide a written explanation for your judgment.
- Some lenders will require you to pay the judgment if it has not yet been paid.
Please enquire online or call us on 1300 889 743 to speak with one of our mortgage brokers and find out whether you can qualify for a home loan.
What do lenders know about my court judgment?
Credit providers will see the court judgment on your credit file.
It is gives them an indication that you have been in financial trouble that you have been unable to resolve.
However, they don’t know the full details of exactly what happened and whether you were at fault or not.
They only know that the court ordered you to pay the other party and that you did not make this payment on time or at all.
They will ask for an explanation behind the judgment and will consider your reason when assessing your home loan application.
A major bank will always assume the worst!
This is why mainstream lenders are very unlikely to consider your application even if you provide full evidence of what has happened.
What does a judgment on my credit file mean?
From a bank’s point of view, a court judgment:
- 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.
- Is a very high risk and will affect your credit score.
Paid or unpaid judgments?
Judgments are worse than defaults because they are court orders.
These are directives to pay a debt of which you have breached the terms and they stay on your credit file for five years whether or not the default has been paid.
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”.
Please discuss this with one of our mortgage brokers before you pay an outstanding 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 repayments 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’s important to know how a judgment will affect your application for a mortgage so that you apply with the right lender.
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 been made.
- A judgment will remain on your credit file for five years.
Please call us on 1300 889 743 or enquire online and one of our specialist mortgage brokers will determine which lenders can approve your loan.