Using a non-occupant co-borrower for a home loan
When you start looking into buying a home, there are several items that can seem like stress points. If your credit is good enough, if you'll be approved for the amount to get that dream home you've been creeping online. Though, if you haven't, you may want to learn about a non-occupant co-borrower and how one might be able to benefit you if you have a good candidate.
What is a non-occupant co-borrower?
These are typically individuals, like family members, added to a mortgage to help you get a loan. They won't be living in the house with you, but their name is on the title. And they have part-ownership in the home. They're basically there to have your back and let you use their credit history and income to help you get a loan. Sounds like a win-win situation, if you ask me.
Benefits of having a non-occupant co-borrower
The main benefit, like The Nest agrees on, is if you're worried about not being approved due to lower income or credit, you can lean on theirs to help your eligibility. On the co-borrower's end, it does offer them part-ownership in the home (so make sure you're comfortable with them). And it also benefits them, if payments are made on time, to help increase their score down the line. So it can definitely be a symbiotic relationship that benefits both parties. If you have someone that is eligible to be a non-occupant co-borrower, that is.
Note: Most guidelines require this individual to be some type of family member. But make sure you talk it over with your lender to know for sure if you're interested in using one.
Awesome! What next?
If you're worried about your chances of being approved, consider a good candidate to ask about being a non-occupant co-borrower. If you have someone in mind, make sure you're both on the same page of what this commitment would mean. From there, talk with your local loan officer to review the requirements and eligibility. They'll be able to drive through the rest of the home loan application process from there.
When you're considering applying for a mortgage, it can be nerve-wracking if you're questioning whether your credit score is good enough. Or your income. But know that you may have options, such as utilizing a non-occupant co-borrower, to help boost your probability of an approval.
Contact a loan officer.
