The Importance of Honesty When Dealing With A Mortgage Lender
When it comes to applying for a mortgage, communication with your lender and loan officer is paramount to making the process smooth and successful. From start to finish, the process of taking out a mortgage has very many intricate moving parts. While it may be tempting to omit information during the process or inflate claims of income and or assets to make yourself seem more suited for your ideal mortgage rate, not only do you risk losing this home if you cannot pay the loan, you also run the risk of being convicted of mortgage fraud – a felony that is punishable by decades in prison and up to one million dollars in fines. Thus, being honest with your mortgage lender is a way of acting in your own best interest.
It is all about trust and communication...
It is important to maintain complete transparency with your loan officer. For example, communicating any employment changes with your mortgage lender is a huge must. Most mortgage lenders like to see two years of solid employment at minimum on a loan application. This implies that you have reliable income and that there is less of a risk that you will default on the loan. If any changes in your employment situation occur during the loan application period (whether that be a change of jobs, a termination or resignation, or even a change in rank or title), it is absolutely imperative that you communicate it with your loan officer. They will appreciate the transparency – trust me!
While it may seem like a smart idea to pad your employment records and lie about amounts earned, the length spent at a job, or owning a small business, know that this will always lead to a denial of the loan you desire. Even if your lies aren’t always detected right away, they could come back to haunt you years in the future. Lenders look at your tax returns as confirmation of your income and the jobs you have worked. Fraud on these applications can cause you to lose your job and seriously damage your credit history.
Debt-to-income ratio is also a significant factor in how a lender determines your eligibility for a home loan. While it may seem tempting to leave a few debts off your mortgage application in order to receive a better deal on your mortgage, be warned that lenders and mortgage brokers always run a standard credit check when processing loan applications. Any debt that is in your name will appear on these credit checks, whether it be car loans, medical debt, student loans, rent payments, or old credit cards, Essentially, this tactic of deception never works – it’s better to be 100% honest about your debt-to-income ratio or anything that may be hindering your credit report from being as good as you want it to be.
The most important thing that I want you to take away from this blog post is to be honest with your lenders – more often than not, if there’s something amiss, we’ll help you to come up with a solution. All mortgage lenders and loan officers want to help you get your dream home, and our purpose is to assist you with just that! If you’re looking for more content regarding mortgage advice and financial literacy, follow me across my social media platforms or continue to check out my blog! If you’re looking to obtain a home loan for the space of your dreams, shoot me a message – I’m more than happy to connect with you to discuss your unique home loan needs!
