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Jan 12
Avoid mortgage fraud with a free mortgage calculator
By Mortgage Calculator on January 20, 2012Mortgage fraud is not as uncommon as you might think and often has nothing to do with trying to get something for nothing. In many cases of mortgage fraud the borrower still intends to buy a home and pay off the loan as set out in the repayment terms, but is applying for a mortgage that they should not be eligible for.
Using a free mortgage calculator can help you to work out how much you are entitled to borrow on which kinds of mortgage, how much repayments are likely to be and how long your repayment term is. There are a number of online resources for different types of mortgage, for example an offset mortgage calculator will show you what you will look to pay back and when should you tie your mortgage in with your savings or current account, while a buy to let mortgage calculator gives you an idea of how much you will be paying if you buy a property to rent it out. Interest only mortgage calculator show the lower repayments involved with an interest only mortgage and so on.
Despite this there are always people who will try to get the most out of buying a property and sometimes this can lead to fraud – and even if you consider what you have done fairly minor, this is illegal and can have drastic consequences.
One of the most common types of mortgage fraud is ‘flipping’, when a house is bought, improved and then sold on for a higher value. This in itself is perfectly legal, but when the seller lies about the costs of the improvements and uses a fraudulent appraisal in order to sell the property off for an inflated price the process becomes illegal and can lead to court action.
Another common type of fraud is using ‘straw buyers’ to get a mortgage. Straw buyers have good credit and are the perfect candidate for a mortgage but are not actually the person trying to obtain a mortgage. They are a front for a person who would not qualify for a mortgage and is thus unlikely to be able to make repayments. Often straw buyers will not know the true nature of what is going on, thinking the property is due to be rented out and that they will make some profit from the deal, whereas in many cases the loan will never be paid off, leaving the buyer in trouble both legally and financially.
Even if it looks likely that you can make a profit from something which does not seem completely above board it is best to stay away from any fraudulent activities to protect yourself from legal trouble – which can have a far more negative impact than losing money on a house sale or not being able to get a mortgage at all.
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