We’re one of Australia’s larger mortgage brokers so we see a lot of applications from all types of people in all sorts of situations.
Something we see more of than we should are loan applications where someone has withheld information or deliberately tried to mislead the lender.
This is a sure-fire way to get your home loan declined with the bank and get an unwanted enquiry on your credit file. Secondly, it wastes both the time of you and our brokers who are really trying to help you.
Don’t make our job hard: the truth will set you free!
Why is lying a bad idea?
You’re going to get caught
The banks are incredibly good at catching you out. They’re way better at it than you think and they’ve seen hundreds of thousands of loan applications.
You could get yourself into trouble
What if your home loan does get approved? Well, maybe the reason that the banks didn’t want to approve your mortgage in the first place was for a very good reason. Maybe you aren’t ready to take on that much debt. In particular, when people lie to increase their borrowing capacity this can be a serious problem.
You probably don’t need to lie
There are so many ways to get approved at a great interest rate if you are in a less than ideal situation. There are low doc loans for people who can’t prove their income, bad credit loans for people with black marks on their credit file and some of our lenders can even accept all sorts of employment and visa types.
What are the common lies?
The most common lies that the banks (and us) see are:
- Undeclared children or spouse.
- Undeclared debts such as credit cards, personal loans or home loans.
- The loan purpose.
- The source of someone’s deposit.
- The value of someone’s assets.
- False residency status.
- False employment.
- False income.
The main purpose of these lies is to either increase their borrowing power or to get past bank lending criteria.
How do banks catch you?
- Data sharing: Banks and mortgage insurers share data to prevent fraud.
- Hidden codes: Many documents have hidden codes on them which makes it easy to see if they have been edited.
- Your supporting documents: There’s a lot more info in your tax returns, bank statements and payslips than you think. The banks can see inconsistencies easily.
- Loan contract: When your loan contract is returned ready for settlement there are additional documents returned with them that can raise eyebrows.
- Red flags: Each bank’s processing system can automatically identify and flag high risk applications.
- Post-settlement auditing: After your loan has been advanced they may audit your file and find something they missed when approving your home loan.
- Known fraudsters: They have lists of accountants, solicitors, conveyancers, real estate agents, developers and mortgage brokers who have been caught for fraud.
This is by no means a comprehensive list. Do you think we’d just publish something on the internet which tells people what to look out for? No.
Do mortgage brokers & bank managers lie?
While the vast majority of our industry are professionals who take their career seriously, there are a few bad apples that take risks to get loans approved.
Some are desperately trying to reach their sales targets, some believe you should be approved and just want to help you.
Either way you are at risk because the banks will treat you as guilty until proven otherwise and they aren’t known for their compassion or mercy.
What are the consequences?
A minor piece of missing information that would not cause the loan to be declined if it had been declared would not normally be a problem. That’s not fraud, that’s just being disorganised.
However, obvious fraud will be treated that way and will be referred to the police. Serious cases can result in imprisonment, so just don’t risk it!
The banks consider whether you had the intention to pay the loan or not. Obviously if someone was trying to steal money then the banks will rake them over the hot coals.
If your loan hasn’t been advanced then your application will be declined, your name blacklisted and you may be referred to the police. This is particularly disasterous if you have paid a deposit on a property and have your approval withdrawn moments before settlement.
If your loan has settled then the bank could go one step further and ‘call in’ your loan. That’s where you get a letter in the mail saying you have 30 days to repay the loan or they will commence enforcement action against you. Good luck with that. You have to refinance or sell, that’s it.
You are affected even if you aren’t responsible for the fraud. So if you know your application isn’t the whole truth then don’t risk it!
How can you get approved without lying?
Firstly, if you can then choose a lender that can approve your loan! That’s what we do as mortgage brokers. There’s nothing more rewarding for us than helping good people who just don’t fit standard bank policy.
What if that won’t work?
Well we can work with you to change your situation so you can get approved in the near future. Often a few simple tweaks will get you an approval in a few months time.
Speak to our mortgage brokers by calling 1300 889 743 or fill in our free assessment form to find out how we can help you to get approved.
If you plan to lie anyway… don’t call us!
We’re on our borrowers side and love to help people to buy a home… except when they lie on their application.
In that case we’re anything but on your side! Most of our mortgage brokers are ex-credit managers so they know how to spot a lie. Our support staff have had extensive anti-fraud training as well and we work with the banks in the event of fraud.
This is one situation where I’ll happily say “talk to our competitors”, they can help you out better than we can.