If you’re considering buying a home but don’t know if your application with your info alone is strong enough – you might be considering a co-signer. Here are a few things you should know…
What is a co-signer?
If you’re wishing to purchase a home or refinance your current home but your debt-to-income ratio isn’t what you want it to be, you may desire a co-signer.
Zillow says some common co-signer scenarios include divorcees, people taking time-off to complete school, or self-employed borrowers whose tax returns show a lower income.
Be Clear with Your Co-signer
Before appealing to your co-signer, be clear on the terms: specifically, if your plan is to one day refinance the home on your own, or if your co-signer expects ownership over a percentage of the home.
Know there are two main types of co-signers: non-occupant co-borrowers (which as the name might imply, won’t be living in the home they’re co-signing for) and occupant co-borrowers (who will be living at said property).
More Things to Consider
As is the situation with co-signers, if the occupant co-borrower is late on making their mortgage payment, the credit of every borrower (co-signer included) on the loan will take a hit. It’s important to discuss the potential risks involved with your potential co-borrower.
There are a multitude of other things to consider when contemplating a co-signer for your mortgage. For more information, check out this block [link] or talk to your SMC Mortgage Banker!