Nearly a quarter of Canadian millennials — 23% — admit to inflating their annual income when applying for a mortgage, according to a new Equifax survey on mortgage fraud.
According to Equifax, mortgage fraud is defined as when someone – you, a mortgage broker or agent, a real estate agent or a lawyer – misrepresents, lies or exaggerates information to obtain a mortgage that would not have been granted if the truth had been told.
19% of millennials — defined by the survey as those aged 18 to 34 — also admitted to not being entirely truthful on credit or loan applications. In many cases, young people inflated their income in order to qualify for something that would normally not be within reach financially.
“It’s concerning that so many younger adults we surveyed believe it’s OK to inflate their income to purchase the home they want,” said Julie Kuzmic, Director of Consumer Advocacy at Equifax Canada.
The housing woes of millennials should come as no surprise, however, given that low wages and an increasing housing prices act as tough waters for any potential home owners.
16% of those surveyed also said they think mortgage fraud is a victimless crime (a legal offence to which all parties consent and no party is injured); and that number was higher among millennials surveyed, at 23%.
“What some may see as a little white lie during the mortgage application process could have legal consequences or become a very hard lesson for people to learn if they cannot keep up with their mortgage payments,” said Kuzmic.
Although they say ignorance is bliss, this may not be the case when it comes to housing and credit, because when it comes to knowing their credit scores, only 40% of respondents said they knew what their credit score was today.
In addition, 60% of survey respondents admitted to not checking their credit scores prior to approaching a lender to secure a mortgage.
When it comes to mortgages, honesty is the best policy, and so is knowing your credit score, says Kuzmic.
“If a person knows their credit scores are low, then they should take the time to establish good credit behaviour before going to see a mortgage lender.”
The survey was conducted with a representative sample of 1,545 Canadians from across the country, with a margin of error of +/- 2.5 .