Lying on mortgage applications ‘could lead to credit problems’

Potential homeowners are being advised not to lie on mortgage applications because it could create long-term credit problems.

Equifax believes that the recent tightening of mortgage lending criteria could encourage more people to lie about their financial circumstances in order to secure a house loan.

However, this could lead to borrowers facing trouble gaining credit in the future.

Neil Munroe, external affairs director at Equifax, explained that providing false or misleading information may contribute to a “downward spiral” when applying for future credit and create debt problems.

“If possible fraud information is shared, then that will come up in further applications. The best policy is to be honest and to see where you go from there,” he said.

The Financial Services Authority has already announced that it has successfully secured its first High Court bankruptcy order for mortgage fraud and Mr Munroe explained that lenders are introducing comprehensive searches to avoid fraudulent applications being approved.

By Suzi Richards