How to Correct Errors on Your Home Mortgage Application

Depending on where and when you made an error on your home mortgage application, there will be a different process to fix the mistake. You should be aware that any errors detected after the loan has been processed and funded will be very difficult to correct. In this case, you will also want to assure you are following proper legal steps. To determine the process you must follow, consider the following factors.

Type of Mistake Made

Small mistakes may be easily changed during the application process or even after the loan has been funded. Small mistakes do not actually affect the size of the loan or loan terms. Examples of small mistakes include:

  • Wrong personal phone number or address if the lender was still able to verify your information during the loan process.
  • Incorrect dates of previous employment if the lender was able to verify your employment.
  • Any information that would be subject to change in the future such as your home insurance company may be changed without altering the contract.

Large mistakes actually alter the way the lender determines your loan terms and amounts. These mistakes can represent real hassle for you and the lender, and they can even lead to allegations of fraud if you are not careful. Examples of large mistakes include:

  • Mistakes on your social security number or other forms of identification verification. If you error on these issues, you will actually be getting a loan based on someone else's credit information. These mistakes are almost always caught by the lender before the loan is sourced, but sometimes issues do arise.
  • Mistakes verifying your salary or income history. Your lender relies on this information to set your limits; if you make a mistake, it may be interpreted as a deliberate lie.

When Mistake is Noticed

Mistakes noticed before a loan is processed may be either changed instantly or the loan application can be withdrawn and resubmitted.

  • Amend the application if the error is very small, such as the wrong digit in a phone number.
  • Withdraw and resubmit an application if you note a large error. Hopefully, you catch the error before the lender does. Once you have withdrawn the application once, you should be particularly careful to correct any potential mistakes. Withdrawing  more than one time could be a sign you were hasty with your mortgage application.

Mistakes noted only after the loan has been processed are harder to fix. This is where you may need legal counsel in order to avoid any potential criminal charges.

  • Small errors that would be subject to change regardless may be handled by amending the current contract. An amendment can be drawn up by the lender, but you may have to pay a small fee to make the change.
  • Large errors that would have changed the terms of your loan should be handled with extreme care. In this case, you will be potentially cancelling the entire mortgage due to the mistake. Make sure you have a plan to avoid losing your property if the mortgage loan needs to be cancelled. A lawyer can assist you in this situation.