I can receive a better mortgage rate on my rental property by stating I live on the premises. Could I get into trouble?
Many lenders offer better interest rates if the homeowner is to live on the property or is a first-time home buyer.
Some borrowers choose to lie about their intent to occupy the property in order to qualify for these lower interest rates. A lie about your intent to occupy the property is fraud and a federal offense. There are severe penalties for misrepresentations made within a loan application. Government officials do prosecute these types of cases. Often, this information is uncovered if a default on the loan occurs or a foreclosure procedure has been enacted. Credit obtained through fraud may not be discharged in bankruptcy.
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