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Can Non-Occupant Co-Borrower Purchase House?

Can Non-Occupant Co-Borrower Purchase House?

This BLOG On Can Non-Occupant Co-Borrower Purchase House Was UPDATED On February 8th, 2019

The Federal Housing Administration (FHA) allows non-occupant co-borrower to be added to the main borrower in order to qualify for FHA Home Loans.

  • The non-occupant co-borrower needs to be a family member and/or related to the borrower by blood, legal status, or marriage
  • The non-occupant co-borrower needs to qualify under FHA Guidelines
  • If the non-occupant co-borrower has a bankruptcy, foreclosure, deed in lieu of foreclosure, and/or short sale, the same waiting period applies as the main borrower
  • The non-occupant co-borrower needs wait two years after a discharge date of Chapter 7 bankruptcy if he or she had filed a prior bankruptcy to qualify for FHA Loans
  • The non-occupant co-borrower needs to wait 3 years from the recorded date of foreclosure or deed in lieu of foreclosure if they had a prior foreclosure or deed in lieu of foreclosure to qualify for FHA Loans
  • The non-occupant co-borrower needs to wait three years from the HUD’s settlement date if they had a prior short sale to qualify for FHA Home Loans
  • The non-occupant co-borrower is not on title and only on the mortgage note

Can Non-Occupant Co-Borrower Purchase House Later

The answer to the question of Can Non-Occupant Co-Borrower Purchase House is yes. Non-occupant co-borrowers often wonder if by co-signing for a family member will affect their chances of buying a home of own later. .

  • By being a non-occupant co-borrower they can still qualify for a mortgage on their own with the debt that they co-signed not affecting them
  • How can this be?
  • Future mortgage lender will not take into account the co-signed mortgage liability if and only if they can provide them with the main borrower’s 12 months cancelled checks to the mortgage company main borrower has been making payments to
  • Although it is on credit report, the future lender will not count it as liability as long
  • This only applies if they can provide them with the cancelled checks from the main borrower they have cosigned
  • Unfortunately, if the person they have co-signed for has been late on their mortgage payments, it will affect credit scores negatively

Can Non-Occupant Co-Borrower Purchase House With No Credit Scores

Sometimes borrowers will have a non-occupant co-borrower with no credit scores

  • Non-occupant co-borrowers with no credit scores are allowed only if they have 12 months rental verification and non-traditional credit tradelines
  • As long as the non-occupant co-borrower has twelve months cancelled checks paid to the landlord
  • Plus three non-traditional credit tradelines
  • Non-Traditional credit tradelines are creditors that do not report to the three major credit bureaus
    • Utility bills
    • Cell phone
    • Auto insurance
    • Tuition

What If Non-Occupant Co-Borrower Has Bad Credit?

Non-Occupant Co-Borrowers With Bad Credit

If the non-occupant co-borrower has bad credit, it can pose a problem. All lenders will take the lower borrowers middle credit scores and use that as the qualifying credit score.

  • To qualify for a FHA insured mortgage loan with only a 3.5% down payment, the minimum credit score required is 580
  • In the event if the non-occupant co-borrower has a credit score below 580, the loan originator can possibly help them boost their credit scores up so it surpasses the 580 mark
  • There are some quick fixes to boost up the credit scores and a rapid rescore can be done

Qualifying For Mortgage With Direct Lender With No Overlays

Home Buyers who need to qualify for mortgage with a national direct lender with no overlays can contact us at The Gustan Cho Team at Loan Cabin at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. Gustan Cho Associates at Loan Cabin Inc. has zero lender overlays on FHA, VA, USDA, and Conventional Loans. The Gustan Cho Team at Loan Cabin Inc. is also correspondent lenders on non-qm loans and bank statement loans for self employed borrowers. We are available 7 days a week, evenings, weekends, and holidays.

By Gustan Cho

www.gustancho.com

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