It doesn’t happen often, but occasionally credit reports are missing some information. What about child support from before your current marriage? That doesn’t show up at all on a credit report. Should you tell the loan officer or just keep it to yourself. If it’s not on the report it doesn’t count, right?

Your loan and your credibility are at risk

You can go to jail if you deliberately withhold information from your mortgage application. It is called fraud and it’s not worth the risk. If you have ever wondered whether or not you must let a loan officer know about something that isn’t on you credit report, now you have the answer. Everything you know about your debts or obligations, regardless of if it may be on your credit report, must be disclosed to your lender. The lender is considering lending you thousands of dollars and has the legal right to full information. If that lender makes a decision to loan you money and finds out later that you withheld pertinent information, you could still go to prison.

Think of it this way. If a friend of yours asked you for a loan, but didn’t tell you something financially critical like they just totalled their car after a hard night of partying and need to get another one as soon as possible. And they didn’t tell you until after you gave them money. You’d be pretty ticked off, wouldn’t you? I would be. Without a car, your friend probably can’t get to work. And no work means no money. So of course you are going to wonder how they’ll pay you back.

A mortgage lender is in exactly the same position. They are making a decision based on a lie of omission.

Here’s the good news

Your loan officer can probably get your loan approved anyway. There are so many creative loan programs available these days, your debt ratio may not be as bad as you think, to a lender. If the lender agrees to make a loan after you have told everything there is to tell about your debts, you have nothing at all to worry about. The lender knows what he needs to know and fraud is no concern of yours.

So, if you have ever wondered about that hidden obligation or been tempted to keep it all to yourself, go with the honest solution and let the loan officer do his or her job. It works better for everybody involved. The honest solution allows you to stay out of jail and live in a nice house. The other decision? Well…..visitors are allowed!

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