It’s no secret – home prices in Michigan are on the rise. If you’re in the market for a new home and are wondering whether or not you can afford a home on your own, bringing on a co-borrower may be a possibility.
You may not need a co-borrower to qualify, but there are benefits to having one.
You can enter the market sooner. In today’s market, it’s all about speed and strength. Having a co-borrower added to your mortgage application can increase your buying power and help you enter the competitive market with your best foot forward.
You can afford a bigger home. If you add a co-borrower to your mortgage application, it’s likely that you’ll be able to afford a larger home at a larger price point. Your Loan Officer will combine your income (if the co-borrower credit qualifies) to determine how much you can spend on a new home.
You’ll have more money for a down payment. Much like income, as stated above, if a co-borrower is added to your mortgage application, their assets are included in financing calculations. Between the two of you, you may have more money saved for a down payment.
Like all things, there are positives and negatives to adding a co-borrower to your mortgage application.
Here are a few things to keep in mind.
Your co-borrower must credit qualify. As mentioned earlier, co-borrower must credit qualify to be included on your mortgage application. We will verify your co-borrower’s income and credit before proceeding. We recommend that you have these conversations with your co-borrower before application is taken.
You are both liable for the loan. Before you add a co-borrower to your mortgage application, please make sure you’re comfortable with the long-term consequences. If a payment is missed or the home is entered into foreclosure, you’re both liable and your credit scores will be impacted.
Trust is key.
If you’re interested in purchasing a new home, we recommend that you sit down with an experienced Loan Officer to better understand your options. We’re here to help any way we can!