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You could go to jail for lying on your home loan application

A father and son giggling in front of their house on the left, and a man reaches out his hand in a jail cell on the right.
Giggles could make way for jail for those who have lied on their home loan application. (Images: Getty)

Real estate markets around Australia are heating up and potential buyers with a fear of missing out might be tempted to take some shortcuts – but this could land you behind bars.

A UBS study last year found 37 per cent of home loan candidates admitted lying on their applications.

But with information-sharing between lenders much enhanced even compared to just twelve months ago, a financial legal firm is warning Australians about how dangerous that practice is.

"It is fraud, and fraud is a serious crime in Australia punishable by jail," said MyCRA Lawyers chief Graham Doessel.

"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."

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If a homeowner has already lied in past applications, Doessel said the truth might come out if they fall behind in their payments or try to refinance their loan.

It might start with what seems like a small white lie, but life will become difficult if it later turns into a fraud conviction.

“Being convicted of a fraud offence is a real pain in the backside,” said Doessel.

“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.”

The warning about home loan applications comes after a legal academic said last year that lies on a resumé could land the job applicant in jail.

"There are crimes of fraud and forgery, and sometimes inaccuracies in a CV or reference could amount to either," said UNSW criminal law professor Alex Steel.

Yahoo Finance last year also reported a Brisbane hospital chef copping a criminal record for fudging her tax return to include workplace expenses that were never incurred.

Doessel said the easiest way for the Average Joe to secure the loan they want is to have a decent deposit and maintain a good credit history.

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

MyCRA Lawyers runs a service called Freecreditrating.com.au where consumers can self-check their credit record. The law firm then acts on the person's behalf to remove any "black marks".

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