Occasionally, home buyers find it necessary to have the further guarantee of a non-occupying co-borrower. Normally this occurs when the primary borrower(s) lack the financial strength to qualify for the mortgage on their own.
All non-occupying co-borrower must be related to the borrowers either as a blood relative or by marriage. Non-occupying co-borrowers who lack this may still be acceptable if a long-term family type relationship can be documented. In no case can the relationship be arising out of the mortgage transaction.
Also, a non-occupying co-borrower, just like the borrower, must exhibit an acceptable credit history. Borrowers or non-occupying co-borrowers who do not have acceptable credit are not eligible for a mortgage loan. The non-occupying co-borrower does not offset poor credit history on behalf of a borrower.
Finally, all non-occupying co-borrowers must take title to the property on the subject transaction. If the transaction is a purchase, they must appear as a purchaser on the sales contract. If they do not, they are not a non-occupying co-borrower but a co-signer for the loan. That is still acceptable, but co-signers do not take title to a property and do not appear on the sales contract if it is purchase transaction.
For more information and requirements, please contact your Googain Loan Officer.