Posted on: 08th Apr, 2004 10:14 pm
A co-borrower is a second borrower who signs the promissory note for a mortgage loan along with the primary borrower.
The primary borrower may not alone qualify for the loan. In such a case, the co-borrower's income, assets, credit history, etc are combined with that of the primary borrower. This helps them to qualify for the loan at a reasonable interest rate. The co-borrower's name must also appear on the mortgage or the deed of trust. He is equally obligated to pay off the loan as the primary borrower.
Example:
Daniel wants to take a mortgage loan from Rodger. But his income and credit history does not allow him to qualify for the loan. His friend John then joins him. Rodger considers the financial status and credit profile of both the borrowers before approving the loan. This helps Daniel and John in getting the mortgage at a better rate of interest. Here, Daniel and Rodger are both co-borrowers.
The primary borrower may not alone qualify for the loan. In such a case, the co-borrower's income, assets, credit history, etc are combined with that of the primary borrower. This helps them to qualify for the loan at a reasonable interest rate. The co-borrower's name must also appear on the mortgage or the deed of trust. He is equally obligated to pay off the loan as the primary borrower.
Example:
Daniel wants to take a mortgage loan from Rodger. But his income and credit history does not allow him to qualify for the loan. His friend John then joins him. Rodger considers the financial status and credit profile of both the borrowers before approving the loan. This helps Daniel and John in getting the mortgage at a better rate of interest. Here, Daniel and Rodger are both co-borrowers.
Essie, in response to your query, it's really not particularly important who the primary and secondary borrowers are. Tradition (if we were being held to that) would say that Mr. is the borrower, period. However, we grew during the late 60s and moving forward, and that allowed Mr. & Mrs. to be joint borrowers (though husbands always came first for quite a while). Over the years, those old, stodgy and dusty traditions wore off, and we are now in a season of understanding and non-prejudice. Either a wife or a husband can be a primary borrower, and either a wife or a husband can be a secondary borrower. That one is a larger wage-earner than the other isn't really relevant to how the names appear.
If you prefer it one way or the other, make that preference known to the lender and I'd have to believe they'll be happy to accommodate you.
If you prefer it one way or the other, make that preference known to the lender and I'd have to believe they'll be happy to accommodate you.
I am the borrower on the mortgage loan and in the divorce my ex-husband was awarded the house. My name still remains on the loan and my ex has a certain amount of years to refinance. If he dies before he refinances the loan in his own name, would his new wife be entitled to the property?
Hi!
Welcome to forums!
Your ex-husband's wife will be entitled to the property if he wills the property to her. If he transfers the property to you, then you will become the owner of the property.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Your ex-husband's wife will be entitled to the property if he wills the property to her. If he transfers the property to you, then you will become the owner of the property.
Feel free to ask if you've further queries.
Sussane
As things now stand, it appears that you and your former husband own the home jointly. That, of course, will prevent the above scenario from taking place. His new spouse cannot become a sole owner of the property upon his death, no matter what his will might say.
You are an owner no matter what, and what you need to do is to attempt to accelerate the timing of his quit claim of his ownership to you. Obviously, in the event of his death, and a concurrent transfer of his ownership to her; you'd be left owning the home jointly with her - and this is, apparently, what you're trying to avoid, I surmise.
Check with your legal counsel to try to determine how you might expedite matters.
You are an owner no matter what, and what you need to do is to attempt to accelerate the timing of his quit claim of his ownership to you. Obviously, in the event of his death, and a concurrent transfer of his ownership to her; you'd be left owning the home jointly with her - and this is, apparently, what you're trying to avoid, I surmise.
Check with your legal counsel to try to determine how you might expedite matters.
I would like to help to my son to buy a small house, like a co-borrower. I am an owner of an other house. The lender offered FHA loan for my son, where I put higher payment down to lower the loan amount. ... What happen, if I get into the situation when I cannot pay of both loans and I go to short sale on my first property? My son is still not able to pay monthly payments, so I have to do that, supporting him. Is it against the law to leave the first home going to short sale and move to the property, where I am the co-borrower? Thanks.
Hi ChrisP!
Welcome to forums!
If you cannot pay off the mortgage, then you can contact your lender and apply for short sale. That is not against law. However, once you short sale your property, you will be liable for paying the deficient balance resulting from the sale of the property. If you cannot pay off that deficient balance, then your lender may place a lien on your son's property if your name is mentioned there as an owner.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If you cannot pay off the mortgage, then you can contact your lender and apply for short sale. That is not against law. However, once you short sale your property, you will be liable for paying the deficient balance resulting from the sale of the property. If you cannot pay off that deficient balance, then your lender may place a lien on your son's property if your name is mentioned there as an owner.
Feel free to ask if you've further queries.
Sussane
My mother is trying to get a reverse mortgage on her home which is paid for, she cosigned with me on my home. I was told that she can't have two FHA loans so she wouldn't qualify.
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