A mortgage is a big financial commitment and is not without risks. Protect yourself by taking the following steps:
Be honest on the mortgage application.
Fill out all documents completely, accurately and truthfully. Errors or missing information could lead to a mortgage that does not fit your needs and providing false information on a mortgage application is considered mortgage fraud.
Do not apply for a mortgage for someone else.
Applying for a mortgage on someone else’s behalf is called being a “straw buyer”. The straw buyer is liable for the mortgage and could be held criminally responsible for their misrepresentation to the lender. Learn more about misrepresentation and mortgage fraud.
Be cautious of “leveraging”.
Leveraging, or borrowing to invest carries high risks. Be sure to carefully consider the investment and fully understand the risks before deciding to take out a mortgage to invest. All investments carry risk, and if the investment does not perform as expected, you will still be responsible for paying back the original amount of the mortgage and interest. Learn more about borrowing to invest (leveraging).
Read the agreement.
Never sign documents without reading them thoroughly and understanding them. If you are unsure, ask questions until you understand, or obtain a second opinion.