Lying on a Mortgage Application

If you might be tempted to add incorrect information on a mortgage application, first you should understand what the repercussions might be, as well 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 out there that don’t involve breaking the law.

In this article, we explore what the consequences of lying on a mortgage application are and what better alternatives to take.

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

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

Falsifying important 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?

Make no mistake, this is mortgage fraud, and you would find yourself in a punishable legal situation very quickly. Even a minor fabrication about your income is unlikely to be overlooked.

The penalty will depend on whether the forgery is classed as ‘opportunistic’, meaning you’ve lied about certain factors in order to obtain a mortgage, or ‘large scale’, which has more to do with organised crime and money laundering via property.

Sometimes less severe crimes will result in a fine or suspended sentence, while the worst-case scenario for lying on a mortgage application in the UK is a 10-year prison sentence. Either way, you won’t be approved for a mortgage.

It’s always worth bearing in mind, however, that securing a mortgage is not always as much of a stretch as you might first think. With the right help and support, such as from an experienced and impartial mortgage broker, it’s highly likely that there are always other options for you.

Read our ‘Can I Get a Mortgage’ article here for more details.

What you might fabricate

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

• Lying about your income: Undoubtedly the most common reason for mortgage fraud, and 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, for many people, it is also unnecessary. A good broker will be able to point you in the right direction for a mortgage that’s a right fit for you – perhaps a high salary multiple like 5x or 5.5 times your salary, or taking into consideration 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 talk you through 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 would put your chances of getting one elsewhere in jeopardy too.
• 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 certainly 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 that still need mortgages, and they 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 your circumstances that 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 relevant specialist advisor. Do this by calling 0808 189 2301 or making an enquiry online.
• What happens next: We find the ideal broker from our network who is right 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.