Buying a home is a huge decision, investment, and can be exciting for first-time homebuyers. Mortgage lenders help buyers with the process, ensuring success in every aspect. From time to time, roadblocks occur, which could postpone the outcome. Even with enough funds to cover a down payment, closing costs, and monthly payments, you could still be denied.
Thankfully, there’s a way around the mortgage denial roadblock: a cosigner.
Someone who cosigns a mortgage has decided to join with another borrower to purchase a home. A cosigner is bound by a legal obligation to repay the mortgage if the primary borrower can no longer perform their financial responsibilities.
Close family members or friends can cosign mortgages and are generally meant to assist the applicant with funding, build credit, or reduce their financial risk. College students or recent graduates are good examples of those first-time homebuyers who might require assistance from a cosigner. With minimal credit history and zero income, it is challenging for them to get approved. Parents usually help these students or recent graduates by cosigning, as they are not required to live in the home. As long as their income can support the loan qualification, the borrower (student) would be approved.
Cosigners are treated the same as other applicants and should be prepared to fill out loan applications, financial information sheets, and explain their relationship to the borrower. The overall credit score will be averaged between the two borrowers. The cosigner will appear on the mortgage, and their credit will reflect that as well.
Ready to apply for a mortgage with your cosigner? Contact the home loan experts at Concord Mortgage today!
EB Mortgage is a locally-owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us at 866-246-0516 or e-mail contact@ebwmtg.com today.
Written by the digital marketing staff at Creative Programs & Systems: www.cpsmi.com.