Co-borrowing on a mortgage is a significant financial decision that can influence both your homeownership journey and your relationship with the co-borrower. Understanding the ins and outs of this arrangement is crucial before diving into joint homeownership. Here's what you need to know about co-borrowing on a mortgage.
A mortgage co-borrower joins the loan application with another individual to either boost the chances of loan approval or secure better terms such as a larger loan amount or lower interest rates. Co-borrowers share equal responsibility for repaying the loan and are automatically listed as co-owners on the property's title.
A key distinction exists between a co-borrower and a co-signer. While both share the financial responsibility, a co-signer is not included on the property's title and does not have ownership rights. In contrast, a co-borrower is listed on both the mortgage and the title, holding an ownership stake in the property.
Two types of co-borrowers exist: occupant and non-occupant co-borrowers. The former lives in the home with the primary borrower, while the latter doesn't reside in the property but holds an ownership stake.
Lenders have specific criteria for co-borrowers, varying by loan type and lender. Co-borrowers typically must not have a financial interest in the property sale and need to meet credit, residency, work history, and debt-to-income ratio requirements.
Selecting a co-borrower demands careful consideration. Assess the relationship dynamics and ensure the co-borrower has a strong credit profile and financial stability to handle mortgage responsibilities.
Co-borrowers' rights align with their title holding. Joint tenants have equal ownership, while tenants in common may have varied ownership percentages. Removing a co-borrower from a mortgage is challenging and often requires refinancing or selling the property.
The decision to add a co-borrower hinges on various factors, including your ability to qualify for a mortgage solo and your comfort with shared responsibility. Consider alternative loan options with relaxed credit requirements if seeking approval independently.
To add a co-borrower, initiate the pre-qualification process with your lender. Both parties must complete the loan application and undergo credit checks and financial evaluations.
Understanding co-borrowing nuances is crucial in making informed decisions about homeownership. Balancing the benefits of better loan terms with long-term responsibilities is key to a successful co-borrowing arrangement.
We've been helping customers afford the home of their dreams for many years and we love what we do.
Company NMLS: 1660690
Individual NMLS: 1162957
www.nmlsconsumeraccess.org
This is not an offer to enter into an agreement. This is not a commitment to make a loan. Not all customers will qualify. Information, rates and programs are subject to change without prior notice. All products are subject to credit and property approval. All approvals are subject to underwriting guidelines. Not all products are available in all states or for all dollar amounts. Other restrictions and limitations may apply. VA loans subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit standards, and property limits. NEXA Mortgage, LLC is not affiliated with any government agencies .These materials are not from VA, HUD or FHA, and were not approved by VA, HUD or FHA, or any other government agency. Copyright © 2020 NEXA Mortgage, LLC NMLS#1660690. AZMB#0944059. 3100 West Ray Rd Ste 201 Chandler, AZ 85226,
602-344-9333. www.NEXAMortgage.com NEXA Mortgage, LLC is an Equal Housing Lender. All rights reserved
563 Deer Valley Dr
Hixson, TN 37343
Phone: (423) 664-7423
dkolbus@nexamortgage.com
Powered By LenderHomePage.com
NEXA Mortgage LLC. strives to ensure that its services are accessible to people with disabilities. NEXA Mortgage LLC. has invested a significant amount of resources to help ensure that its website is made easier to use and more accessible for people with disabilities, with the strong belief that every person has the right to live with dignity, equality, comfort and independence.
NEXA Mortgage LLC. makes available the UserWay Website Accessibility Widget that is powered by a dedicated accessibility server. The software allows callthatloanguy.com to improve its compliance with the Web Content Accessibility Guidelines (WCAG 2.1).
NEXA Mortgage LLC. accessibility menu can be enabled by clicking the accessibility menu icon that appears on the corner on the page. After triggering the accessibility menu, please wait a moment for the accessibility menu to load in its entirety.
NEXA Mortgage LLC. continues its efforts to constantly improve the accessibility of its site and services in the belief that it is our collective moral obligation to allow seamless, accessible and unhindered use also for those of us with disabilities.
Despite our efforts to make all pages and content on NEXA Mortgage LLC. website fully accessible, some content may not have yet been fully adapted to the strictest accessibility standards. This may be a result of not having found or identified the most appropriate technological solution.
If you are experiencing difficulty with any content on NEXA Mortgage LLC. website or require assistance with any part of our site, please contact us during normal business hours as detailed below and we will be happy to assist.
If you wish to report an accessibility issue, have any questions or need assistance, please contact us by sending an email to: dkolbus@nexamortgage.com