Did you know that having a court writ or judgment on your credit file can be a red flag that affects your chances of getting a home loan? 

Most banks might reject your application if there’s a court writ, even if it’s already paid. However, some non-conforming lenders might consider your loan application, depending on certain criteria. 

Loan Amounts and Criteria: With specific lenders, you could borrow up to 90% of the property value. To qualify, having a good explanation for unpaid court writs and a larger deposit increases your chances of loan approval. 

Qualifying with a Bank: Most banks prefer borrowers with a clear credit history and may not approve loans for those with any type of bad credit. If a bank does consider your application, borrowing is limited to 80% of the purchase price, requiring a substantial deposit. 

Writ Circumstances: Banks are often indifferent to the reasons behind a court writ. They see it as a sign of a high-risk borrower. Providing strong evidence, like timely payments on other debts or a change in financial circumstances, may help your case. 

Specialist Lenders: Specialist or non-conforming lenders are helpful for non-traditional borrowers with credit issues. They may not delve into the cause of the court writ but typically require a larger deposit and evidence of financial strength. 

Interest Rates with Specialist Lenders: Specialist lenders usually charge 1 to 3 percent higher interest rates than standard banks due to considering higher risk. A larger deposit can help secure lower interest rates, and in some cases, qualification for standard bank rates is possible. 

Duration with Specialist Lenders: After repaying the writ, it can be removed from your credit file. Timely repayments with a specialist lender for at least 12 months may enable you to refinance with a major lender, but not all may accept your application. 

Understanding Court Writs: A court writ is a formal document issued by the court, often related to a case against you or your company. It can be recorded on your credit file, impacting your ability to get credit, including home loans. 

How Long Does a Court Writ Stay on Your Credit File? A court writ stays on your credit file for five years. The legal process for removal varies by state and may involve actions like a Notice of Discontinuance or a Consent Order, depending on the settlement of the matter. 

While a court writ on your credit file may seem daunting, prompt debt repayment showcases your commitment to settling debts, potentially improving your loan eligibility.