It can be challenging to buy a house. Moderate income, low credit scores, and high home prices are some of the obstacles standing between you and your new home. If you’re struggling to meet mortgage guidelines like debt-to-income ratio, you may want to consider adding a co-borrower to your mortgage.
A co-borrower is someone who takes out a mortgage loan with you to help you afford the home. A co-borrower might help you qualify for the loan by increasing the amount of income and assets used to qualify. They could also help you with funds for a down payment. A co-borrower does not necessarily have to live in the house with you. An occupant co-borrower is someone who will purchase the home with you and live in the property as a primary residence. A non-occupant co-borrower will not live in the property but will assist you in qualifying and paying for the property.
Some reasons to consider a co-borrower might be:
- Young buyers in expensive cities
- First-time home buyers with lots of student debt
- Retirees with little income flow
- Self-employed people without tax returns
- Most co-borrower situations involve family members and personal relationships.
Alternative loan options for low credit or low income are down payment assistance programs and FHA loans. You may also want to consider gift funds—money gifted to you by a relative or family member to use for a down payment.
If you’re ready to get pre-approved—co-borrower or not—fill out the form below!