As such, accuracy is of the utmost importance. Unfortunately, some applicants attempt to bend the truth or even lie on their mortgage applications, leading to potential problems. In this article, we will discuss some of the potential ‘sins’ that can disqualify an applicant from getting approved for a loan.
One of the most common sins is providing inaccurate income information. This includes misrepresenting the amount of money you make, or inflating it in order to qualify for a larger loan. Mortgage lenders will verify your income with tax records, and if the two numbers don’t match up, you could be in trouble. You should also provide information about any other sources of income such as alimony or investments.
Another sin involves omitting debts or liabilities. It’s important to include all of your debts, even if you think they won’t impact the outcome of the loan approval. Mortgage lenders will look at your debt-to-income ratio, so omitting them could leave you unable to meet the loan requirements and disqualify you from a loan.
Some applicants also fail to mention prior foreclosures, bankruptcies, or other negative items on their credit report. This is a major mistake, as mortgage lenders will check your credit record to determine whether you’ll be able to make payments on time. If these issues aren’t mentioned upfront, you could find yourself denied access to a loan at the last minute.
Finally, fudging assets or not being honest about your source of funds can be another issue. Mortgage lenders need to verify that you have the money to close on the home and make payments each month. Providing false information, such as listing non-liquid assets as liquid, can result in problems down the line.
In summary, it’s important for applicants to be completely honest when filling out a mortgage application. Lying or omitting information can lead to disqualification from the loan or, worse, potential legal problems. If you’re unsure of what to include or how to represent something on your application, it’s best to consult a mortgage professional to ensure accuracy and honesty. Doing so can help improve your chances of being approved for the loan and avoiding potential issues.
This article was contributed on Dec 07, 2023
