Lying on a Mortgage Application

If you might be tempted to add incorrect information on a mortgage application, first, you should understand the repercussions and the likelihood of getting away with it.

While you may initially believe that providing misleading statements is the only way to be granted a mortgage, there are certainly better options that don’t involve breaking the law.

In this article, we explore the consequences of lying on a mortgage application and suggest better alternatives.

Will a mortgage be approved if you lie on a mortgage application?

It is doubtful that you’ll cheat the system, and it’s strongly advised that you don’t even attempt to. Firstly, it’s illegal, and secondly, you won’t even get past the first barrier towards getting approved for a loan anyway.

Falsifying essential data about yourself will be discovered relatively quickly by stringent lenders who will expect to see evidence of your eligibility, and they will verify it. This includes personal information and wage slips, for example. Even if you did manage to use deception to get through the initial stage of an application, it would most likely be uncovered at the underwriting stage.

What are the penalties for lying on a mortgage application?

Lying on a mortgage application constitutes fraud, risking criminal charges, fines, and up to 10 years in prison. Other penalties include asset seizure and community service. While pleading guilty might reduce the sentence, providing truthful information is essential to avoid these severe outcomes.

Penalties depend on the fraud’s nature. ‘Opportunistic’ fraud involves lying about personal finances to secure a mortgage, while ‘large scale’ fraud, often linked to organized crime or money laundering, carries stricter penalties due to its broader impact.

What you might fabricate

There are a number of specific inaccuracies you might be tempted to document:

• Lying about your income is undoubtedly the most common reason for mortgage fraud, and it comes about when people believe they don’t earn enough to get a mortgage. While lying to a mortgage lender about this will always get flagged up in background checks, it is also unnecessary for many people. A good broker can point you in the right direction for a mortgage that fits you – perhaps a high salary multiple 5 or 5.5 times your salary or considering supplementary income while remaining above board.
• Lying about your marital status: Whatever the thinking behind not declaring your true status, including whether your partner has credit issues, you should note that you don’t have to take out a joint mortgage just because you’re married. A broker will discuss your options, including joint borrower and sole proprietor agreements. And there are flexible lenders if you know where to look.
• Lying about dependents: If you think declaring the truth about this might affect how a lender views your creditworthiness, and while it’s true that your affordability will be assessed, there are always lenders out there who use their discretion on this. If you’re wondering whether or not to disclose any child support you’re receiving, the answer is yes. Always be transparent and honest. This information, in particular, might even work in your favour.
• Lying about being a first-time buyer: If you’re hoping to tap into any deals or allowances that come with having this status, don’t do it. Banks check and will even know if you’ve been a homeowner previously overseas. Being found out could result in your mortgage being withdrawn, and it would also put your chances of getting one elsewhere in jeopardy.
• Not declaring credit cards: While it might be tempting to hide away any credit issues or debts you’ve had or still have, the lenders will get to know the truth anyway. Rest assured that this is not the only path. There are good, reliable, bad credit brokers out there, like the ones we work with, who realise there are people with credit issues who still need mortgages and work hard to secure these for you.

What to do if you’ve already lied on your application

If you haven’t been honest on your application and have yet to submit it, don’t. Start again from scratch with the help of a broker, and you are far more likely to end up with a successful mortgage deal that works for you.

If you have already sent it, don’t panic. Contact the lender and tell them you need to amend some details before it goes any further. Being honest is the best way to rectify the situation. Again, work with a mortgage broker who will hold your hand through the necessary steps.

What should you not tell a mortgage lender?

You should always be 100% transparent on your mortgage application. There are no facts about yourself, your finances or circumstances you should keep secret. Ultimately, the truth will come out, and you may face consequences if you are not honest. It’s also unnecessary.

How to get matched with the right broker

Now you know that the most sensible option when you’re feeling under pressure while trying to get a mortgage is to work with a good broker, here is how you go about finding one:

• Contact us for a free initial consultation so we can match you to the specialist advisor. Call 0330 818 7026 or make an enquiry online.
• What happens next: We find the ideal broker from our network suitable for your situation and introduce you.
• They will then work with you to find the best deals, contact the most flexible and amendable lenders in their contacts, and help you with your completely above-board application.
• After that, you will be in a much better position to secure a mortgage and buy a home without deception looming over you.