One out of every 10 Canadians says that it is acceptable to inflate stated income on a mortgage application form in order to secure a higher loan, according to a new survey by credit agency Equifax Canada.
And 9% of respondents admitted that at some point they have not been entirely truthful on a credit or loan application.
The survey also found that Canadian homebuyers are increasingly worried about protecting their personal data. Most respondents (79%) said they are more concerned now about safeguarding personal data than a year ago, and 81% believe that lenders should be doing more to protect them from fraud and identity theft.
"Consumers and lenders are certainly becoming more wary of the potential threats related to fraud and identity theft," said Tim Ashby, vice-president of Personal Solutions at Equifax Canada. "In the home-buying process, a lot of personal data is on the table when dealing with mortgage brokers, real estate agents, and lawyers among others."
He condemned the practice of adding misleading information to loan applications, not only because it is fraud, but also as being damaging to consumers' data protection.
"Make no mistake, lying on your loan application is a type of mortgage fraud," said Ashby. "Whether you're a lender or a consumer, data protection and the integrity of the data should be priorities at all times. For the consumer, it's not just a matter of protecting your information, it's critical to know what's on your credit file - especially when looking to buy a new home."
The credit agency also discovered that Canadians embarking on the mortgage brokering process are not any more informed about their credit score than the general population. Only 23% of respondents said that they know their current credit score versus 26% who knew it at the time they applied for a mortgage.
"Tens of thousands of extra dollars are being spent to service a mortgage simply because people don't know their credit score," said Ashby. "Maintaining a healthy credit report by paying bills on time will go a long way in securing a loan at a lower interest rate."
An Equifax credit score ranges from 300-900, with higher scores viewed more favourably. Most Canadians (71%) have a credit score of 725 or higher, which is considered to be very good or excellent.
