There is no doubt you imagine lenders attempting to rip off unsuspecting homebuyers when you think about mortgage fraud. Do you know that it is possible to commit fraud even as a mortgage applicant? Over the years, it has been proved that 1% of all mortgage applications contain some instances of fraud.
You might be aware that a simple lie on your application can land you in hot water even if you don’t intend to be malicious. You might be imprisoned for more than 30 years when you engage in mortgage fraud. It is good to know that mortgage fraud is one of the biggest federal crimes. Have you been looking for reliable ways to avoid mortgage frauds? Here are the best moves that will help you avoid such frauds.
Interest rates and home values have been increasing for the last couple of years. Numerous homeowners want to get in since they can manage to do it. You might be tempted to use your income in order to qualify for a larger loan if your dream home is more than what you can afford. This makes sense more so if you own your own business. As a business owner, you will be in a position to fudge the numbers.
Be guaranteed that you are not the only person in such a situation. In most cases, income fraud involves misrepresenting the existence. Mortgage lenders have been known to verify income against tax returns. You need to know that you will not qualify for the loan if the numbers don’t match. In such cases, there will be possibilities of being accused of attempted fraud.
Your lovely parents might have contributed a few thousand to help you achieve your dreams. It is good to do that, but using gift money for down payment comes with a few rules. Which are some of the rules associated with gift money? Money can’t be given in the form of a loan that is to be paid back.
A homeowner will be allowed to bump his or her down payment without increasing debt income ration. It is not only a fraud but also a large sum of money can cause a financial dispute with your family members.
Do you know that the only way to represent loan as a gift is committing a mortgage fraud? You have the full freedom to borrow money against an asset if you really want to come up with the funds.
Why is this route risky? Your mortgage lender will require a paper trail. What if you are caught lying? There are multiple consequences. The seller may be tempted to strike a deal on the side of the home’s list price is much higher when compared to the buyer’s willing price.