Mortgage Lenders Are Your Friends
When it comes to purchasing a mortgage, it is hard not to worry
about all of the expenses and finding a good rate. It is understandable
that under this pressure, it is easy to fib to a lender about
your credit or the source of your payments, especially your down
Some reasons people lie about the source of their down payment
is that they may receive a higher interest rate if their source
was a gift or grant. It may seem impossible to come up with the
down payment and afford the interest rate, but there are options
to help you afford these expenses.
Some people use assistance programs to help with the down payment
and this is when they may conceal the source of the money. For
example, a federal-housing administration-insured mortgage requires
a down payment of at least three percent. If you do not have enough
in savings, you can accept the money from a non-profit agency.
The seller is not allowed to pay. The seller may then contribute
the down payment in addition to a fee to the non-profit agency.
Once the home closes, the non-profit agency will give the down
payment. The buyer never receives the cash, it is simply a transaction
made from the agency directly to the settlement agent.
All of this is legal and in compliance with the FHA-insured loans.
This must be recorder on the HUD-1 statement, a form that is required
for almost all home mortgages.
You may ask why it is so important to disclose all of the correct
information when closing a loan. If nothing else, the answer is
that it is a federal offense to make a false statement on a loan
application. Any information that you know to be incorrect can
constitute being a lie, and this will make you a candidate for
a federal crime. More importantly, besides the risk of getting
caught, there is no need to lie! There are so many options these
days for people with poor credit or low-income, that it is really
an unreasonable and unnecessary risk to be dishonest when applying
for a loan. It may save you a tiny bit in interest, but is that
worth the chance of being a criminal?