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Lying about monthly rent on a loan application...

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Lying about monthly rent on a loan application...

Old 01-30-06, 09:18 PM
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Lying about monthly rent on a loan application...

So someone I'm intimately familiar with may have lied on a loan application. He/She/I may have told the financial institution that he/she/I still lived with their/my parents and paid no monthly rent, when in fact said person does pay rent to the apartment complex that they've/I've been living in for two years.

Ok, it was me.

I was only pre-approved for the loan and I didn't sign anything if that makes a difference.


So just how bad is this? I know it was dishonest and after telling my girlfriend about it I actually feel pretty guilty and scummy about having done it, that's why I'm posting here.



*As an aside, the loan expires in 30 days and I'm 99.99% sure that it will not be used within that time period, so another application will be processed with the proper amount of rent indicated.


Also, if this is against forum policy to discuss this on these boards I sincerely apologize. I realize that I may or may not be walking a pretty fine line with this, so I'm trying to tread lightly.
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Old 01-30-06, 09:21 PM
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I'd get over it and move on. Really, what's the big deal?
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Old 01-30-06, 09:23 PM
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Originally Posted by Sanitarium
I'd get over it and move on. Really, what's the big deal?
Agree. If you aren't going to use it, then why stress it?
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Old 01-30-06, 09:24 PM
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What's the loan for?

I'm confused - you were actually renting at an apartment but told them that you were living with your parents and paid nothing? Why did you do that?
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Old 01-30-06, 09:31 PM
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Originally Posted by Quake1028
Agree. If you aren't going to use it, then why stress it?
Well, there's a very slight chance that I might use it. If I can get enough $$ together to make a down payment then I may be able to use it before it expires. Otherwise, I'll be waiting until April so I can get through February, which is already proving to be a very expensive month.

And I'm stressing it because my girlfriend has an exceptional gift for making me feel guilty when I've done something wrong. It like her mutant power.


Originally Posted by Ranger

What's the loan for?

I'm confused - you were actually renting at an apartment but told them that you were living with your parents and paid nothing? Why did you do that?
It's for a new car.

And I figured that it was better to appear as if I had as few monthly expenses as possible. I don't really know if that matters or not, but it was sound reasoning at the time.

Obviously I do not have a good grasp on what lenders are looking for when they're granting loans.
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Old 01-30-06, 09:32 PM
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Take the lump sum.
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Old 01-30-06, 09:32 PM
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Why did you lie? Is that better, credit-wise, than if you showed you were able to pay a monthly rent check?
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Old 01-30-06, 09:33 PM
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He did that to reduce is reported monthly expenses. No monthly expenses = bigger loan approval.

They have an approval process for a reason. They'll only approve you for what they think you can pay back. If you borrow more than you can reasonably pay back, you're just screwing yourself.
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Old 01-30-06, 09:36 PM
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Originally Posted by asabase
He did that to reduce is reported monthly expenses. No monthly expenses = bigger loan approval.

They have an approval process for a reason. They'll only approve you for what they think you can pay back. If you borrow more than you can reasonably pay back, you're just screwing yourself.
Exactly.

I'm not really looking to borrow that much, and I'll definitely be able to pay it back. My monthly payment will only jump $40/month, which is do-able, and my rent will drop by approx $100 at the end of Feb.

Plus, I'm hoping to save a little more money trading in the gas guzzling V8 (~14-16mpg) for something much more economical.
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Old 01-30-06, 09:37 PM
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I thought that you usually have to show some kind of bank statement and pay stubs for pre-approval of loans? Their "approval" is really as much for your protection as it is for them. If you have the money, it won't really matter what your monthly expenses are since you can afford it and they really won't care how much you fudged your application. If you don't have the money, you're really only screwing yourself over since your credit report gets shot to hell and your car gets repo'd.
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Old 01-30-06, 09:37 PM
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Originally Posted by criptik28
Why did you lie? Is that better, credit-wise, than if you showed you were able to pay a monthly rent check?
Saying you pay no rent helps your debt to income ratio.
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Old 01-30-06, 10:39 PM
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Originally Posted by hahn
I thought that you usually have to show some kind of bank statement and pay stubs for pre-approval of loans? Their "approval" is really as much for your protection as it is for them. If you have the money, it won't really matter what your monthly expenses are since you can afford it and they really won't care how much you fudged your application. If you don't have the money, you're really only screwing yourself over since your credit report gets shot to hell and your car gets repo'd.
I got pre-approved for my car loan online through my credit union. I didn't have to prove anything.
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Old 01-30-06, 10:42 PM
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Unfortunately, because of this incident you will now be required to pay cash for your DVDTalk Premiere Membership.*

(*when the heck is this going to be ready any way?!)
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Old 01-30-06, 10:49 PM
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Lying is bad, mmmmkay?

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Old 01-30-06, 11:00 PM
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Well seeing as how I'm the Finance Manager for an auto dealership, let me shed some light on this.

We, at the dealership, are not required to verify the expenses you report on your credit application. The bank/credit union/financial institution, however, may or may not confirm the validity of the information you gave them. Certain things will pop up on your credit report--monthly rent is not one of them. A mortgage, however, will show up.

If the lender finds that you lied on your credit application, they have every right to deny your loan. Or, if you've already taken the loan and they find later on that you lied, I believe they can demand immediate payment for your full loan balance, or repossession. This would be VERY bad.

Basically, you've committed written perjury (I forget what the correct legal term is) because the credit application says something along the lines of "everything that I have stated in this application is true and correct".

Anyway, with all of that said, people lie all the time on their credit applications--which doesn't mean it's right--but you shouldn't stress too much about it.
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Old 01-30-06, 11:51 PM
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immortal_zeus makes some good points. Don't take the loan. Putting aside the fact that lying is wrong, I bet there is an acceleration clause in the loan that would cause it to become due in full in this type of situation.

I don't mean to be a dick, but if you have to lie about living with your parents to get approved for a loan, you aren't ready for it. Which is fine, just wait until you can get approved on your own. Good luck!
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Old 01-31-06, 12:02 AM
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I forgot to add one thing.

Ironically, unless your debt to income ratio is totally out of whack, most lenders favor you living on your own and paying rent versus living at home with your family and paying zero rent.

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Old 01-31-06, 12:51 AM
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Originally Posted by immortal_zeus
I forgot to add one thing.

Ironically, unless your debt to income ratio is totally out of whack, most lenders favor you living on your own and paying rent versus living at home with your family and paying zero rent.

I live at home and pay no rent. I've got $1000 debt to about $30,000 credit. Am I good?
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Old 01-31-06, 01:19 AM
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I don't know that I've ever had an auto dealer do anything other than check my fico score. Maybe they have and I just don't remember it, though. I guess I wouldn't worry about it, but then I am tight with money and wouldn't borrow more than I could afford. If you are certain of your finances, I wouldn't worry. Do you know you couldn't get approved if you showed your rent payment? Honestly, most banks lend people more than they should, and if you had to really stretch to get the loan, you are probably better off without it.
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Old 01-31-06, 01:55 AM
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Originally Posted by PopcornTreeCt
I live at home and pay no rent. I've got $1000 debt to about $30,000 credit. Am I good?
You mean you have $1000 balance, but you can go as high as $30,000 (i.e., $1000 credit card balance with a $30,000 credit limit)? If so, that's pretty good. If you pay well and don't have late payments, that will help, too. You'd be surprised how a few late payments could really adversely affect your credit score.

Also, lenders look at your monthly nut. For instance, if you have a revolving credit balance of $30,000 and it equates to monthly payments of $300 (paying the minimum due every month), that's a lot better for you than a $20,000 revolving credit balance with a $600 monthly nut.
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Old 01-31-06, 07:24 AM
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Originally Posted by kvrdave
I don't know that I've ever had an auto dealer do anything other than check my fico score. Maybe they have and I just don't remember it, though. I guess I wouldn't worry about it, but then I am tight with money and wouldn't borrow more than I could afford. If you are certain of your finances, I wouldn't worry. Do you know you couldn't get approved if you showed your rent payment? Honestly, most banks lend people more than they should, and if you had to really stretch to get the loan, you are probably better off without it.
That's all they did with me, check my fico score and send me on my way.

And, yeah, I'm certain of my finances. I make more than enough to make the loan payments while still paying my current rent. I know that, but I think I was afraid that the credit union wouldn't see it that way.

I net somewhere around $2300-2500/mo right now, and my rent is $660/mo (soon to drop to approx $500/mo after I move at the end of Feb.). I know that I'd be able to make the payments with no problem, even with added expenses such as car insurance and other miscellaneous bills.

I know that lying on credit apps is something a lot of people do, which is part of the reason that I didn't feel so bad about doing it at first, but now I'm just not feeling right about it.
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Old 01-31-06, 07:59 AM
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So this is for a car loan? It's still not entirely clear. Just re-apply at the end of February when you rent is lower.
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Old 01-31-06, 10:41 AM
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Beware the acceleration clause. I would re-apply with an honest application.
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Old 01-31-06, 11:53 AM
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if your FICO is good you can lie all you want on the application and no one will care as long as you make the payments
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Old 01-31-06, 12:05 PM
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Originally Posted by immortal_zeus
Well seeing as how I'm the Finance Manager for an auto dealership, let me shed some light on this.

We, at the dealership, are not required to verify the expenses you report on your credit application. The bank/credit union/financial institution, however, may or may not confirm the validity of the information you gave them. Certain things will pop up on your credit report--monthly rent is not one of them. A mortgage, however, will show up.

If the lender finds that you lied on your credit application, they have every right to deny your loan. Or, if you've already taken the loan and they find later on that you lied, I believe they can demand immediate payment for your full loan balance, or repossession. This would be VERY bad.

Basically, you've committed written perjury (I forget what the correct legal term is) because the credit application says something along the lines of "everything that I have stated in this application is true and correct".

Anyway, with all of that said, people lie all the time on their credit applications--which doesn't mean it's right--but you shouldn't stress too much about it.
Holy crap, you're alive!!!
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