What are the Consequences of lying 2 mortgage Company?

Question

I want to stay in my current home and buy an investment property. What are the consequences of lying to the mortgage company saying the new place will be my primary, but really renting it to avoid the higher interest loans?

Answer 1

It's called loan fraud - a felony. People have been prosecuted.

Remember, always do the honest thing. What happens down the road when you want to buy another investment property? Plan on lying again? Don't get in the habit.

Answer 2

I would be more concerned with the tax liability issues than with the mortgage company.

I actually have a lower intereste rate on rental property than my primary residence, so it's not always higher. Also, if you buy it as primary and then turn it into a rental property, they can't call the loan or up the interest rate. I think you only have to live in it 6 months before renting it out.

Answer 3

That is called loan fraud and it is a federal offence. Due to rising default rates the feds are really cracking down on this type of thing.

Don't do it. It isn't wirth the price you will pay when you get caught.

Answer 4

Do you look good in Armani Black and White Stripes ? How will they find out ? Ummm....since you are claiming that this is your personal residence, the rental place is where they will send your loan documentation and communication.

Answer 5

In your next life, you come back as a bottom feeder mortgage lender that spams YA for business.

Answer 6

It would also be tax fraud, should you ever sell the property and not claim the capital gains on the property.

Answer 7

how does a lower interest rate compare to a longer jail sentance?
loan fraud is really not worth it.