Don't lie about your down payment's source
By Holden Lewis at Bankrate.com

Honesty is the best policy when getting a mortgage. Watch out for anyone who asks you to withhold information from the lender.

Some home buyers might be tempted, for example, to fudge the facts about the source of their down-payment money. A lender will assume that the down payment comes from savings. If the money comes as a gift or a grant, that fact has to be disclosed -- even if it means the borrower has to pay a higher interest rate or shell out for mortgage insurance.

For the complete article:
http://www.bankrate.com/brm/news/mortgages/20041118a1.asp