Criteria to getting a mortgage cosigner
Article by Mortgage Guru
A few years back, my uncle approached my mother for her help in applying for a mortgage loan. According to his banker, his income was not sufficient to qualify him for the mortgage loan. If my mother could become his mortgage cosigner, the combined income and credit history would likely increase his chances. Unfortunately, due to certain financial restraints, my mother had to decline his request; she assumed that she would have to share the mortgage payments with him and that was not possible at the time. Eventually my uncle found someone else and was granted a loan. Like my mother, many people are confused with the terms cosigner and co-borrower. Was she correct in assuming that she would have to share the payments if she became a mortgage cosigner? In a way, she was. A co-borrower is someone whose name is included in the loan application and his/her status is similar to that of a borrower. The income and credit rating of both the primary borrower and the co-borrower are usually taken into account in determining the loan application. Both parties are equally obligated to repay the loan. Generally, a co-borrower also has ownership interest in the mortgage property. On the other hand, a cosigner usually does not have any ownership interest, and is only obligated to repay the loan if the borrower defaults on his/her payments. In a way, a cosigner acts as a form of guarantee to the loan. This is why one should always be comfortable with the borrower