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What Happens If You Lie On Your Home Loan Application?

Studies reveal that 37% of home loan applicants lie on their homeloan application forms

With the real estate market hotting up homebuyers will need to make themselves look as good as they possibly can to get a loan in a very competitive and tightly regulated loan market.

Those suffering from FOMO, Fear Of Missing Out, may even be tempted to lie, inflating their earnings, assets and the like, but leading Australian consumer and financial law firm MyCRA Lawyers says don’t, because it’s potentially fraud and now your bank will find out.

Despite that it seems Australians, particularly those taking out investment loans, are fudging their applications.

A recent survey by investment bank UBS found up to 37 percent of applicants had lied on their loan applications.

The survey of 903 Australians found those who had bought more than one property in a single financial year were the most likely to lie.

About half of borrowers with two or more investment properties admitted to being less than truthful about their earnings and debts.

“Chances are to date most people will get away with lying, but that’s now changed, as banks are able to see your statements even from another bank when you give permission as part of your loan application.

“Since the Royal Commission into banking lenders, particularly the big 4, have the ability to share information about potential borrowers.  

It means if you lie about your wage the bank will be able to cross check it against your statements.

If you lie about your debts they will be able to check with just about every lender in the country except your local loan shark,” Mr Doessel said.

So what if you have already lied, well you might be okay, provided you don’t fall behind in your repayments or don’t try to refinance. But beware!

“It is fraud, and fraud is a serious crime in Australia punishable by jail,” Mr Doessel said.

“Even if you don’t get a ten year stretch, being convicted of a fraud offence is a real pain in the backside.  

You might recall the last time you applied for insurance they asked if you’d been convicted of fraud, well now you will have to say yes, not only is it embarrassing, it means you won’t get insurance or at best have to pay a much higher premium,” he said.

“For most people the easiest way to boost your chances of being approved for a home loan or any loan for that matter is to have a deposit and a good credit history.

A blemished credit file these days is behind more people to being rejected for a loan than almost any another cause.

“It is something easy to keep tabs on by annually requesting a copy of your credit file from the three credit reporting bodies in Australia, you can find links to these at, and if you find something we’re happy to take a look and point you in the right direction,” Mr Doessel said.