Applying for a mortgage can be stressful. After scrimping, saving and spending many hours researching prospective neighbourhoods and property types you want to live in, you finally put your financial info into a mortgage calculator. Once you are satisfied with the results, it is time to get pre-approved and hope you qualify for a lower rate.
A lot of numbers go into a mortgage application, and you might be tempted to exaggerate a few of those numbers to give yourself a better chance of qualifying. But, no matter how small of an omission or error on your application might be, it is still considered fraud.
Here are five things to avoid so that you do not unwittingly commit mortgage fraud or get taken advantage of during your mortgage process.
Thoughtfully Fill Out Your Mortgage Application
It is essential to spend the required time filling out your paperwork. Be sure to provide authentic pay stubs and letters of employment. You must also disclose all existing debts. Also, honestly fill out the intended purpose of your property. If it will be your rental property, do not misrepresent it as your primary residence.
Use a Reputable Broker or Lender
Prospective homebuyers should be wary if a mortgage seems too good to be true. You should shop around for a mortgage and get a second opinion for offers like that. One way to make sure is to work with a legitimate mortgage broker or lender.
Licensed brokers are required by law to provide you with the necessary information throughout your mortgage process. That includes:
- Documents relating to the mortgage rate on offer
- Your broker or lender’s role
- Your broker’s relationship with the lender that they recommended
- Potential conflicts of interest
- Whether they receive any compensation from the lender
- Details on the total cost of borrowing
You should make sure your broker or lender has given you this information as you go through the mortgage process.
Once you have chosen a lender and receive approval, you will get the commitment letter from them. Make sure it is stamped by the lender and includes certain conditions such as proving you have the necessary insurance for a home appraisal. If you do not receive a commitment letter that has the conditions and terms clearly explained, then you technically do not have a mortgage.
Have a Lawyer Look at Your Contract
A legal professional should look over your mortgage contract and work independently from your prospective lender. They can help explain any questions about your mortgage documents and make sure everything is as it should be.
The Bottom line
If you misrepresent information on your mortgage application or let someone else falsify documents, you are committing mortgage fraud and could face severe consequences. To ensure your mortgage is legitimate and that you are given the best rate, contact Arise Mortgage Corp. We can also help answer any questions you have and make the process easier.