Have you heard the saying “honesty is the best policy?” That’s generally true in life—but it’s especially true when it comes to real estate.
If you’re buying a home
, lying to your lender—even a “harmless” white lie—could jeopardize the whole deal. And while you should refrain from telling any lies, there are certain ones that are almost certain to cause issues with your real estate purchase.
So what, exactly, are those lies? A recent article from realtor.com
outlined the white lies that could destroy your chances of successfully buying a home, including:
Saying you’re going to live in the home, when you’re actually planning to rent it out. If you’re planning to buy a house
as a rental property (whether for a short-term or long-term rental), you need to disclose it. If you don’t, it could be considered mortgage fraud—which can result in a felony charge.
Not being honest about where your down payment money is coming from. It’s certainly not uncommon for buyers to get financial help when they’re buying a home
. But if someone (for example, a parent) has gifted and/or loaned you money to cover your down payment, you need to let your lender know. Generally, it won’t be a problem—but if you lie about where the money came from, that could end up being a problem.
Leaving out debts. When you apply for a mortgage, you need to disclose every single debt, no matter how big or small. Your lender will discover the debt during the underwriting process—and if they find out you knowingly lied, it could cost you your mortgage.
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