If you’re like many people, you’ll need to finance your new home purchase. However, for many people, buying a home on their own isn’t a feasible financial decision.
In cases such as those, most people choose to buy with a co-signer.
What is a Co-Signer on a Mortgage?
A co-signer is someone who agrees to pick up the slack if you cannot make your mortgage payments. Your lender will check the co-signer’s credit and income to ensure that he or she is financially qualified to partner with you on a loan.
Many people who choose to get a loan with a co-signer do so for a variety of reasons that often include needing help qualifying for a loan. Many self-employed borrowers, for example, need to work with a co-signer because their tax returns don’t reflect their actual income; other people, who haven’t had time to build up their credit scores, may choose to work with a co-signer because lenders are reluctant to grant them credit.
Non-Occupant Co-Borrowers vs. Occupant Co-Borrowers
Typically, lenders look at co-signers in one of two ways: as non-occupant co-borrowers or occupant co-borrowers. Both will share ownership in the home with the original borrower, though.
A non-occupant co-borrower won’t be living in the home.
An occupant co-borrower will be living in the home.
Requirements for Co-Signers on Home Loans
In most cases, co-signers are subject to the same credit requirements and income requirements as other buyers are.
Typically, one are both parties will have to come up with the money for a down payment (unless you are working with a VA loan or an FHA loan that doesn’t require a down payment).
Are You Buying a Home in Lake City or Elsewhere in North Florida?
If you’re buying a home in Lake City or in another community in North Florida, we’d love the opportunity to help you.
Call us at 386-243-0124 or contact us online so we can begin searching for your next home right away.