Borrowers unwittingly damaging credit history
By
Adam Smith
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31/10/2011 3:00:00 AM
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Some borrowers are unwittingly damaging their mortgage repayment history due to a "mismatch in timings", Smartline has claimed.
The brokerage has warned borrowers that mistakes in the timing between due repayments and household cash flow is seeing some borrowers unknowingly miss repayments. The company's managing director, Chris Acret, said the oversight may be damaging some borrowers' ability to secure credit in the future.
"“As a result of the GFC, all lenders considerably tightened up their lending criteria with a much greater emphasis on the credit worthiness of applicants. In this environment, you really can’t have a clean enough credit history for the lenders and any suggestion that a person can’t meet their debt repayments on time is a red flag," he commented.
Acret said the oversights could be particularly damaging to borrowers who find themselves in LMI territory.
"The mortgage insurers won’t even consider an applicant with any hint of loan arrears," Acret said.
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