I Thought CoSigners Were For Cars

Dated: 07/09/2016

Views: 398

Johnson City Homes

You may have had someone sign for you sometime in your past as a co-signer, most likely for an automobile loan. Co-signers can give the needed support as you establish your credit, and give good faith guarantee of payment to a lender or finance company. Did you know you can also have a co-signer on your home loan? Yes, Virginia, there is a Santa Claus!

Today we look at some details of the home loan co-signer. As noted above, you might use a co-signer on your home loan if you're young and just getting started in financing. In some situations, people facing divorce may need a co-signer to help qualify for a home. People who have been self employed and whose tax returns don't fully reflect an actual income might use a co-signer to bridge the gap. In any case, you should be absolutely sure that all parties involved are on the same page in the transaction. 

There are two types of co-signers on a home loan. One is a non-occupant co-borrower, and the other is an occupant co-borrower. Non-owner co-borrowers are the most common type of co-signer. Lenders require that anyone on the loan must also be on the title to the home, so a co-signer will be considered an owner of the home, and equally liable for the repayment of the mortgage loan if the other defaults. If borrowers take title as joint tenants, the occupant and non-occupant co-borrowers will each have equal ownership shares to the property. We should stop here and advise co-signer beware; if the occupant co-borrower is late on the mortgage, this could hurt not only the occupant's credit, but could also hurt your credit as well. 

Different lenders could have specific requirements for the home loan co-signer, depending on factors like down payment amount. We at The Shields Team have excellent resources to be able to best advise you on whether you need a co-signer, and if you're a co-signer, the requirements for co-signing, and your ownership role for the property being purchased. Call us today and let us connect you with one of our trusted lenders who have served past clients well, in most all situations. Our office is waiting for your call at(423) 433-6517, or we would love opportunity to sit down with you for a no obligation consultation before you talk with the lender. We think you'll be glad you did!


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Rayne Price

Holding a BS in Environmental Science, and MA in Education, real estate was not Shields Team Buyer Specialist Rayne Price's first career choice. It was only after encouragement from his wife and a cl....

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