A lot of people fabricate the figures when asked about their income. But it is important to state accurate figures when filling out loan or credit application. You might think that exaggerating a bit about your salary won’t harm anyone, but this is not the case, it can cause you serious consequences.

According to a survey report, 90% people in Canada admitted that they were not being truthful about their salary on credit or loan application, and 10% people think that it was fine to falsify their income on mortgage application.

However before you make false statement on a mortgage application; you should keep in mind that you can be charged with making fake statement on loan application. It is very tempting to over-state your income to get what you need but this is not the right thing to do. Following are some reasons which explain why you should avoid it.

  1. After all it is a fraud. It can put you in serious situation, your lender can black list you.
  2. Lying is not the way to get what you want. Your mortgage lender can provide you better options to deal with the situation. Your mortgage broker can help you in improving your credit and maintaining your financial position.
  3. Other than legal charges, lying about your income while filling out your loan or credit application to make it appear that you are earning more than you do could cause you serious problems. No wonder you will get approved for a large mortgage amount and you may use all of it for your needs. But it is better to limit yourself to one slice of dessert when the whole thing is available before you. It is hard to resist but you should know that you can’t take too much.
  4. If you take on a mortgage that is larger than you can manage, it’ll definitely affect your financial situation. You may have to drop in your standard of living. In case of emergency, you may be short of money, if you have taken too much debt.
  5. It may also increase your risk of defaulting on loan payments. As a result this will affect your credit score. In severe cases, you may have to consider about taking another loan or filing for bankruptcy if the situation gets out of hand.
  6. It is usually considered that people who are working on commission based jobs or people who are self-employed lie about their income. People who get salary or commission should focus on their base income with commissions for last three years. People who misguide lenders about their income are not causing any harm to them in fact they are putting themselves in danger in the long run.
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