Here are a few of the most common lies told on mortgage applications – and why you should avoid them at all costs.
We all want to put our best foot forward, especially when journeying towards something we want. And when it comes to buying a home, getting approved for a mortgage is often the make-or-break factor. So it’s no wonder some people are tempted to fudge the truth on their mortgage applications. Unfortunately, while a little white lie might seem “trivial,” it can seriously damage your application.
- Inflating Your Income – One frequent fib is inflating your income to make yourself look more financially stable. Unfortunately, this strategy can backfire. First of all, most lenders require tax returns or pay stubs as proof of income. So if you inflate your income, you’re likely to get caught. Secondly, even if you manage to get away with it, you could end up in over your head financially if your actual income doesn’t meet the expectations. So why take the risk? Just be honest from the start, and you’ll have a much better chance of getting approved for a mortgage.
- Claiming You Have a Higher Credit Score Than You Actually Do – Lenders will pull your credit report as part of the loan application process, so it’s only a matter of time before they find out the truth. Plus, if you’re not approved because of your low credit score, you’ll damage your credit further by applying for multiple loans.
- Overstating Your Assets – Another common misrepresentation is overstating your assets. Again, lenders will find out about these eventually – so it’s best to be upfront about them from the start.
- Omitting Debts From Your Credit History – Another white lie that can hurt your chances of getting a mortgage is failing to disclose all your debts. This includes credit card debt, car loans, student loans, etc. Lenders need to know about your debts to assess your financial situation properly. If you fail to disclose any of your debts, it’ll likely lead to a denial of your mortgage application.
- Misrepresenting Your Employment Status – With employment history under intense scrutiny these days, more and more people are misrepresenting their employment status on their mortgage applications in an effort to obtain approval. Unfortunately, mortgage lenders take discrepancies in your employment history very seriously, and even a small lie can jeopardize your chances of getting approved for a loan. So if you’re tempted to exaggerate your work history, think twice – it’s not worth risking your chance to buy a home.
While it’s understandable to want to put your best face forward, it’s essential to be honest about who you are and what you can afford. After all, a mortgage is a big responsibility – and one that you’ll be stuck with for years to come.
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