A Finder survey of 1114 Australian homebuyers, including 310 who already have a mortgage, found one in eight lied on their home loan application.
The lies included inflating their income and fibbing about how much debt they had.
Home loan expert Richard Whitten said lying during the home buying process is a “recipe for disaster”.
”Falsifying information on a mortgage application can have serious consequences,” he said.
“Not only could it potentially qualify as fraud, it could also lead to the loss of your home in a worst case scenario.”
But while the lies can have serious implications like fraud, Whitten said in the current economic environment borrowers could be finding themselves in deep financial water.
”While the lies might go unnoticed – the financial burden of an unaffordable loan could create a lot of stress,” Whitten said.
“You’re putting yourself in a risky position if you lie on your application and borrow more than you can afford.”
As interest rates soar and inflation remains sky-high Whitten said it is no surprise Aussies are lying on their application to secure a property.
“Aussies are scared of being rejected and missing out on getting on the property ladder,” he said.
“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.”
Home loan applications typically have conditions around providing correct information while inserting misleading or incorrect details may legally mean the lender could enter a default event and sell the property from underneath you.
“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.
Aussies are urged not to inflate their income figures or neglect to pop in their current loans or credit card debts when applying for a home loan.
The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.