HOME > BLOG > Home Loan Advice > Joint Borrowing = Full Disclosure

It is extremely important that borrowers disclose all relevant information when applying for a home loan as it could affect your chances of obtaining a home loan.

It is not out of the question for a husband and wife to keep the other in the dark, when it comes to disclosing all their financial commitments.

We all know the common jokes about wives having extra credit cards for those "emergency" shopping days.  But when applying for a home loan, be warned, secrets may get exposed!  It is not unheard of for one party to a loan application to have previously applied for credit without the other person’s knowledge.  Similarly, one partner may have requested their pay office to make automatic deductions from their pay to a third account – again, without the knowledge of their spouse.

So what happens to these secrets when the husband and wife apply jointly for a home loan?

Well, when applying for a loan, all parties to the loan application will be required to sign or agree to a Privacy Statement. The terms of this privacy statement may prescribe what information is and isn’t shared by the lender with all applicants. However in the absence of any specific clause don’t assume your secret is safe. Joint borrowers are jointly and severally liable for the loan, and any joint loan application may give an assumption that information can be shared and discussed with either or both joint holders. 

These days lenders demonstrate a very low tolerance for applicants who don't disclose all their liabilities. The National Consurmer Credit Protection Act places an obligation on lenders to verify some of the information provided by applicants. For this reason, don't assume your secret will remain safely hidden from your spouse. As the lender seeks to verify your financial position, all sorts of secrets could get exposed. Perhaps it is best to adopt a position of full disclosure with your spouse before applying for a home loan. Isn't it best they hear your hidden secret from you first?