Salvador Cortez at Absolute Mortgage Group Inc.
Salvador Cortez
Absolute Mortgage Group Inc.
Phone: (916) 668-0043
Email: [email protected]
NMLS# 1813194
Company NMLS# 1874315
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Have you been asked to cosign by someone looking to get a home loan approval? You may be wondering why they would ask or how this affects you. This article will help you to understand both of these points.
These are the top reasons that home loan applicants seek a co-borrower:
Income: People may ask for a cosigner to include more income on their mortgage application. Higher income on the application can make it easier to get approved or borrow more from the lender.
Credit score: Having someone with a higher credit score may help to secure a lower rate.
Employment: Little or poor employment history can prevent mortgage approval. Having a cosigner with better employment history can aid in getting a mortgage.
Cosigning affects your credit and finances, so you must trust the person you're cosigning for. Should they be unable to pay the mortgage, the responsibility falls on you. Also, any late payments or foreclosures will negatively affect your credit score.
Additionally, this new debt could make it more difficult for you to get approved for future credit. Ironically, it could mean that the only way you could get a loan is by getting a cosigner, too.
While there may be an option for the cosigner to be released from the loan, you should still be prepared to take over the mortgage (and accept the risks) if this option is not available.
Non-occupant means that the cosigner will not live in the home, while occupant means that they will. Here's how that affects the loan:
A non-occupant co-borrower on a conventional loan means that they are on the loan but not on the property's title. The co-borrower's credit is pulled, and the score is used to help determine loan qualification. However, the non-occupant co-borrower does not own the property.
There are some restrictions with an FHA loan when it comes to a non-occupant co-borrower. First, you can have up to two non-occupying co-applicants. Second, the person occupying the property must have no more than a 70% debt-to-income ratio when the downpayment is less than 20%.
Thirdly, non-occupant cosigners must be on both the title and the loan, and the property must be a single-family residence. Additionally, the non-occupant co-borrower must be a relative.
Of course, this article doesn't cover all the requirements for cosigning on a mortgage. But it does help you to better understand your responsibilities as a cosigner and how to qualify with one. Need help getting approved for a home loan on your own? Need more answers about cosigning on a mortgage? We're here to help! Contact us today for all your mortgage needs.
We've been helping customers afford the home of their dreams for many years and we love what we do... Company NMLS: 1874315 Personal NMLS: 1813194 NMLS Consumer Access
1942 Del Paso Road, Suite 130 Rm 103 Sacramento, CA 95834 Phone: (916) 668-0043 [email protected]
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