While most of us would never commit fraud knowingly, a lot of us have fudged some numbers from time to time, to make ourselves look better to a lender or the like. Here are some things we might do when applying for a mortgage that seem innocent enough but could actually land us in a lot of hot water.

Changing your income

Perhaps the most common thing done that is technically considered to be mortgage fraud is fudging our income when we apply for a mortgage. It’s very tempting when trying for a home that’s just a little bit outside of our budget, but resist the temptation and stick to the truth to avoid committing fraud!

Getting a personal loan for the down payment

It’s not at all uncommon to get some help from parents or other well-off friends or family members to pay a down payment on a new house, nor is it fraud IF you follow the rules. The biggest rule is the money must be a gift, not a loan. If you have to pay back the money borrowed for a down payment, you may be committing fraud.

Taking out a “silent second mortgage”

The term “silent second mortgage” means to take out a loan on some other asset to pay for a down payment. This is very similar to getting a personal loan from a friend or family member and is equally illegal. Mortgage lenders will often catch this type of trickery as well, due to meticulous checking of sources for all funds used to make the down payment.

Making a side deal

Sometimes, when the buyer and seller of a property get together, they may decide to make a side deal that isn’t mentioned to the mortgage lender. This type of dealing is technically mortgage fraud, whatever form the deal might take. Some such deals are fine and legal, but only if discussed with the lender first.

Claiming a rental as your primary residence

When applying for a mortgage, you need to disclose whether you are planning on living in it as your primary residence or renting it out. Lying about this to change the terms of your mortgage (such as lowering interest rates) may be tempting, but it is also fraud and can get you into trouble!