Lying on a Mortgage Application

Mortgage applications can seem strict and daunting, but lying to lenders is not the answer. Let’s look at what it might mean.

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Home Mortgage Application Lying On A Mortgage Application
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Updated: February 12, 2024

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.

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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: 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 5 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.

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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.

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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.

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FAQs

Yes, they could. The mortgage verification scheme allows a lender to check with HMRC to clarify the details inputted on an application match the revenue’s records. This scheme is now being used more frequently to stamp out mortgage fraud.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

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Pete Mugleston

Mortgage Advisor, MD

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