While a coborrower or a cosigner offer support during the mortgage process, there are important differences between the two. One would share ownership in the home while the other ensures the lender that you have a backup if you miss payments. But do you know which is which?
A coborrower, also known as a joint applicant or a co-applicant, is a person who applies for the mortgage loan with another borrower. The coborrower shares ownership of the home, as well as the risks and responsibilities. Spouses typically apply for a mortgage with their partner as a coborrower. As a mortgage lender is looking at two incomes instead of one, a primary borrower and a coborrower may be able to qualify for a higher loan limit or lower interest rate more easily.
A cosigner is a person who signs with the primary borrower but holds no legal rights to possess the property. If a primary borrower has little to no credit history, a lower credit score, low income, or a high debt-to-income ratio, a cosigner can help them qualify for a loan they would otherwise not be qualified for. They take on the full legal responsibility for repaying the loan if the primary borrower misses payment.
Typically, a cosigner is a family member or loved one in a better financial state than the borrower. A cosigner could be beneficial for a younger borrower or a first-time homeowner.
For a smooth mortgage process and reliable service, contact us today! Our Loan Originators are ready to help your homeownership dreams come true, whether you’re applying with a cosigner, a coborrower, or on your own.
Homestead Funding offers exceptional customer service and a convenient mortgage process. Whatever your financing needs, our goal is to exceed your expectations.
“This website uses cookies to ensure the best user experience. By using our website you consent to all cookies in accordance with our Cookie policy.
Read More
.jpg)
