Mortgage with Poor Credit History and Old PDL

JRut

Hi, me and my husband have been living in a house owned by his parents for the past 6 years. We do not pay rent, but instead pay £650 pm in to my husbands savings account.

My father in law has offered us to buy the house, however I have poor credit history (previous marriage, being a single parent, SMP for 9 months). My credit file shows two defaults of £34 and £21 Orange and EE that I wasnt aware of, I had several pay day loans last year that were all paid on time, other than that all is good - I pay everything on time.

I'm currently paying large lumps off of all credit commitments: credit cards/catalogues to reduce these as much as possible before applying in June/July.

I am employed and earn a good salary of £50k pa and my husband is self employed (1 year). House value is £340k and we are being gifted a deposit of £140k so I need a mortgage for £200k...does it seem possible I will be succesful with this? Any tips to improve my chances of being accepted greatfully received.

Many thanks in advance.

ACG

Satisfy those defaults sooner rather than later.

When you say "I" I assume you mean "we"? As in you and your husband want a mortgage? You will have more options doing it jointly with gifted equity from your father in law.

There should be options at normal rates for you. But the pay day loans will kill it off with some lenders.

Bermonia

The better question may not be ‘can’ you but ‘should’ you?

You have lived somewhere rent free for six years, however have defaults and have had to resort to payday loans... this suggests an underlying issue with regards to income/expenditure - I would ensure that this is first on the agenda as you are about to consider taking on a bigger financial burden than you had previously (and struggled).

JRut

Thank you. I don't know who to contact to satisfy them, Orange is part of EE now and I have an account with EE which is all up to date. Do I just call and say that it is on my credit file? Having checked Experian and Equifax they show nothing of these defaults and Noddle is only showing one at £41. As my husband has only been self employed for 1 year, I wasn't sure if he should go on the application.

JRut

We want to get back on the property ladder so yes...it hasn't been rent free we have had to pay £650 each month and the payday loans were when my husband first went self employed as we were practically living off just my wage with two children. Defaults were for closed phone accounts and I was never sent a final bill so hardly... Not very helpful at all...

ACG

Yes, call up EE and ask them how you clear it.
His income may not be taken in to account but he can still go on the application.