Never say you make more than you really do on your loan application. It’s:

• Stupid
• Criminal
• And Stupid

For a short time, you have more money. But then you spend it. Now you have to pay it back. Your lender assumes you make more money than you really do and oh look, they expect you to pay more than you can. Says consumer lawyer Sam Glover:

“We see a lot of this. Someone comes in for a consultation who is in trouble financially. They can’t afford mortgage payments, and so they come to see me with a story about how their mortgage broker predatorily convinced them to get the mortgage loan. As evidence, they point to their vastly overstated income on the loan application. When they do this, we point to their signature at the end of the loan application.”

Instead, Sam advises buying a cheaper house, or continuing renting until you can afford one legitimately. — BEN POPKEN

Resolution #3: don’t overstate your income on a loan application [Caveat Emptor]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.