Why You Should Never Lie on a Mortgage Application
You should never, ever lie on a mortgage application. Whether you’re thinking about an outright lie or simply an exaggeration, there are several reasons it’s not a good idea. Mortgage companies have sophisticated fraud detection systems in place; chances are greater than not that any errors or mistruths will be discovered. The consequences range from having your application denied to facing potential criminal charges for bank fraud. Here’s a closer look at why individuals sometimes lie on mortgage applications – and honest strategies that can get you a better result, no matter what your concern.
Understanding mortgage fraud
It may be a small jump in your mind from stretching the truth about your income or expenses to committing fraud. But banks and other lenders take a hard line on mortgage fraud. According to the FBI, mortgage fraud is one of the fastest growing white collar crimes in America today. If you commit mortgage fraud, you’ve either omitted or misrepresented details on your signed applications.
Usually, these issues are detected during the loan process. However, if they’re detected once the loan is in effect, the bank can demand full repayment. It can also lead to investigations, fines, and jail time. Mortgage fraud most often involves overstating your income, leaving out critical details such as debts, making false statements, identity theft, or lying about occupying a property.
Finding another solution
In some cases, borrowers are trying to increase their perceived income to boost the total amount of the mortgage they’re eligible for or they’re trying to hide a bad credit scenario. Rather than go down this dark road that can have serious consequences, remember that it’s possible to obtain a mortgage under a wide range of circumstances.
Take the time to understand the bigger picture of your situation. Determine your specific concerns. Do they relate to past credit indiscretions? Perhaps you think your income is too low to qualify for a mortgage. Maybe your debt-to-income ratio seems too high. Whatever the reason, contact a qualified lender. Explain your situation in detail to this person. With their expertise, they’ll be able to evaluate all of your options.
There are a number of different lending programs that fall outside traditional loans, from first-time homebuyers programs to second chance loans with alternative lenders. There are also different ways of structuring loans that can give buyers more flexibility on the total amount of the purchase or covering closing costs. Finally, if all else fails, an experienced lender can give you strategic advice on where to focus your efforts to improve your chances of approval the next time you apply.
Are you a prospective homebuyer in the Las Vegas area? Contact Sydnee Johnson today to arrange for a personalized consultation and learn more about how to successfully fill out a mortgage application.