Housing market Australia: Finder survey says one in eight Aussie homeowners lied to secure a loan

Housing market Australia: Finder survey says one in eight Aussie homeowners lied to secure a loan

A survey found that Australian homeowners lied about their personal details to secure a home loan.

Data from the Finder survey of 1,114 respondents showed that at least one in eight people had lied on their home loan application forms, with 310 of the respondents having a mortgage.

If the ratio were applied to the wider population, it would equate to 429,000 mortgage lenders admitting to falsifying their details during the home buying process.

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It was also found that four percent of respondents admitted to lying about their income and the debt they still owed in their home loan applications.

Finder home loan expert Richard Whitten said lying on these applications can still have consequences in the future, even if the lies aren’t caught right away, including losing your home.

“Falsifying information on a mortgage application can have serious consequences. Not only could this potentially qualify as fraud, but it could also lead to the loss of your home in a worst-case scenario,” said Whitten.

“While the lies may go unnoticed – the financial burden of an unaffordable loan can cause a lot of stress.”

Thousands of Aussie homeowners lied about income and debt on their home loan applications, according to a Finder survey. Credit: AAP

While Whitten says it’s not entirely surprising to lie on home loan applications, he warns that significant differences in a person’s finances can be grounds for legal issues and greater debt down the road.

“As housing affordability weakens, Aussies fear being rejected and missing out on the property ladder.

“While small inaccuracies may not be the end of the world, if a lender finds a major discrepancy in the figures you’ve given them or if you’ve outright lied about your financial position, the consequences can be severe.

“Home loan contracts typically contain wording around providing misleading or incorrect information to a borrower. At worst, lying on a mortgage application is grounds for an event of default, which means the lender can sell your property.

“Legalities aside, you put yourself in a risky position if you lie on your application and borrow more than you can afford.”

Despite rising interest rates and inflation, property values ​​continued to trend downward in many of Australia’s capital cities. Credit: AAP

Whitten also advises aspiring homeowners to be honest about their income and to disclose all loans and credit cards when applying for a home loan.

“It’s important to track expenses because sometimes people forget where their money goes.”

In addition, he warns that those who are caught lying could have their credit score affected, or their loan repossessed.

“Lenders cross-check everything and applicants who intentionally provide incorrect information can potentially get a black mark on their credit score, and in severe cases, applicants can have their loan called in, meaning they have to repay the loan in a hurry.”

Besides lying about their income or debt, common lies told by lenders include overestimating the value of their assets, claiming that an investment property is an owner-occupied property, claiming false residency status, the source of deposit funds misrepresent and even outright lie about your own property. employer details.

Concerns about housing

Australia’s cost of living crisis continues as interest rates hit a ten-year high of 3.10 percent in December, with the next rate hike expected in February.

Despite rising interest rates and inflation, property values ​​continued to trend downwards in many of Australia’s capital cities, with the biggest declines in Sydney and Canberra. Adelaide is also experiencing high sales prices.

Nationally, home prices fell by an average of 4.1 percent in the September 2022 quarter, followed by a 3.3 percent drop over the three months to December 31, 2022, real estate market research company CoreLogic found.

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