To answer this question, you need to know the difference between a co-signer and a co-borrower. Each of these borrowing partnerships can assist your home-buying needs in different ways, with the primary similarity being that they both share in the financial obligation to repay the loan.
A co-borrower may be on title with the primary borrower and have a legal right to ownership, but it is not a requirement that the co-borrower’s name be on the deed. The mortgage lender will consider assets, credit scores, debts and down payment funds of both borrowers. Having a co-borrower can increase your buying power by getting a better interest rate and qualifying for a larger loan. A co-borrower is expected to share in the legal and financial responsibility of paying back the loan.
Friends or family members with credit scores and income that are higher than yours can use their financial status to help you qualify. They would be co-signers whose primary purpose is to give the lender assurance that they are assuming the financial liability for the repayment of the loan.
A co-signer will not be considered a borrower on your loan application, but a lender will use due diligence in doing a credit check and reviewing the financial status of the co-signer. The debt obligation will appear on their credit report. A co-signer increases your chances of qualifying to buy a home and obtaining a lower interest rate.
Please contact me so we can determine if having a co-borrower or co-signer will assist you in buying a home.