Jeff’s Carlsbad Blog for First Time Home Buyers


Buyers, Don’t Be Liars

Posted in Financial by Jeff Dowler on May 10, 2007

moneysign2.gifThis is advice for all buyers, not just those of you embarking on your first purchase. If you are doing this for the first time you might not think about the possible implications, or think that perhaps it doesn’t matter, if the truth is, shall we say, modified a bit.

I am NOT assuming that you will do this. However, I have to be straightfoward with you – there are plenty of stories of situations in our current market where buyers are lying, or distorting the truth, or leaving out certain details – either deliberately or perhaps because they don’t think certain details are important. I want to strongly encourage you to NOT do so.

Lots of folks have various financial situaitons that are not prisitine (more than you would think). Past credit or payment issues, small loans that aren’t mentioned, varying income (self employment) or income that cannot be verified, and so on. Some things show up on credit reports and some do not. Or some details get missed by the mortgage broker. Or you don’t get asked the right questions.

I want to encourage you to be very upfront and honest about your personal situation with your mortgage person. Don’t try to hide credit or payment issues, don’t mislead them on loans you have, or problems you have had in the past. It will come back to bite you.

Lying about your situation might get you the pre-approval, but a full-fledged investigation to finalize the loan might end up with you NOT getting your loan commitment. And you can lose the home you are trying to buy. Worse, lying about certain situations, given the legal contract you are in, CAN be construed as FRAUD (say you had a foreclosure in the past but lie about it when asked).  Obtaining a loan via fraud is serious and can land you in real hot water, and perhaps in jail or with a big fine.

A further problem is that this CAN put your transaction at risk, and may also mean the seller gets to keep your earnest money or down payment. Ouch!

Does this happen? Yep. I have an agent-friend who had just such a buyer submit an offer on his listing and the transaction fell apart at the 11th hour.

So be honest about your situation. Lots of times there are ways to work out these issues, or correct them, and your broker will appreciate it. In today’s market everyone is being more cautious – agents, mortgage people, and sellers. It just doesn’t pay to be dishonest. And it can really cost you.

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