If you’re interested in taking out a low doc home loan, there are a number of things to prepare before approaching a lender. With the nature of these mortgages, the precautions are heightened to protect both parties involved in the transaction. While you won’t have to bring as many pieces of information along to successfully secure a home loan, one of the essential ones is your repayment history.
What is a repayment history?
A repayment history is information detailing your credit results and whether or not you’ve been reliably making repayments to your creditors in full and on time. It also keeps track of late payments, providing an in-depth and comprehensive overview of your spending habits and suitability for credit in the future.
Why is this information important when applying for a home loan?
When it comes to special home loan products, lenders need to be extremely sure about your ability to repay the mortgage. This means the information included in your repayment history will be used by the credit provider to ensure the sought after home loan is suitable for the situation.
For example, if the home loan will be outside of your repayment means without putting you in serious economic jeopardy, or simply making sure you won’t default on the repayments, leaving them out of pocket and without a source of capital return.
Furthermore, if you’re interested in a refinancing transaction, it’s essential for you to bring along your repayment history as well. Normally, mortgages will require you to supply a minimum of six months worth of repayment history. Following this, three months of detailed repayment history for other outstanding debts is the general rule of thumb for refinancing.
