Aussies caught lying on mortgage applications to secure a dream home
Thousands of Aussies have admitted to lying on their home loan applications.
Thousands of Aussie homeowners have admitted to telling a fib in order to secure a mortgage, according to new research.
A Finder survey of 1,114 respondents – 310 of which had a mortgage – revealed one in eight (13 per cent) lied on their home loan application. That’s the equivalent of 429,000 mortgagors admitting to falsifying details during the home-buying process.
The research found a worrying 4 per cent of Aussie mortgagors admitted they lied about their income – more than 100,000 people. The same proportion (4 per cent) lied about how much debt they had during the application process.
Also read: Making a mountain out of the mortgage cliff
Also read: $9,584 a month: Suburbs feeling the most mortgage pain
Also read: Mortgage discount: Simple trick to get instant rate relief
Finder home loan expert Richard Whitten said stretching the truth during the home-buying process was a recipe for disaster.
“Falsifying information on a mortgage application can have serious consequences. Not only could it potentially qualify as fraud, it could also lead to the loss of your home, in a worst-case scenario,” Whitten said.
“While the lies might go unnoticed, the financial burden of an unaffordable loan could create a lot of stress.”
Whitten said it was not totally surprising that house hunters were lying about their finances, especially as housing affordability deteriorated.
“Aussies are scared of being rejected and missing out on getting on the property ladder. While small inaccuracies may not be the end of the world, if a lender finds a big discrepancy in the figures you've given them or you've outright lied about your financial position, the consequences could be severe,” he said.
"Home loan contracts typically contain wording around providing misleading or incorrect information to a lender. In the worst case, lying on a mortgage application is grounds for a default event, meaning the lender could sell your property.”
Whitten urged Aussies not to inflate income figures or omit a loan or credit card when applying for a home loan.
“It’s important to track expenses as people sometimes forget where their money goes. Lenders cross-check everything and applicants who intentionally provide incorrect information could potentially receive a black mark on their credit score and, in severe cases, applicants could have their loan called in, meaning they have to repay the loan in a hurry,” Whitten said.
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to our free daily newsletter.