Getting a Co-Signer Can Save A Deal

With the ever increasing underwriting restrictions these days, it is no surprise that many of our mutual customers feel that they can’t qualify for a mortgage. Then, if we factor in slightly higher interest rates as well, quite a number of possible buyers get dismayed that ownership of even a small apartment is beyond their reach.

In reality, things couldn’t be further from the truth. For nearly everyone with a decent credit rating, qualifying for a mortgage and purchasing the home or apartment is not daunting at all. As a matter of fact, approvals are still easy to come by; especially with under the guidance of a good mortgage broker. Virtually every bank has special niche mortgage products designed to meet even the most challenging of deals. With all sorts of first time homeowners programs, and PMI financing, it is rare to find a deal that can’t be done.

Most of the time, the easiest solution to a seemingly impossible deal is merely to recommend that the buyers get a co-signor for their loan. Here is a prime example of when it is a great idea to suggest a co-signor. Let’s say you are showing a young couple a one bedroom apartment for $400,000. They tell you that they haven’t saved much, but they can get a gift from their parents. They also tell you that their incomes are great and that combined they make over $150,000 per year. You have a great deal on your plate and then, all of a sudden, the bombshell hits: the husband missed two car payments in a row last year and he is currently late with Macy’s. His wife’s credit is excellent, so you try to explain this to the bank that she will “correct” his ways, but this, of course, simply doesn’t work. The wife, however, only makes about $15,000 per year, and it is part time as well.

Dead deal? Absolutely not!!! Guidelines at a number of our banks allow the occupying borrower to make just $1.00 (that’s right just one dollar) per year and parents or siblings to guarantee the loan. This is called co-borrowing where they actually take title to the property and co-sign on the loan as well. The parents are called non-occupying co-borrowers and as long as they can carry the loan (and have a good credit rating) the loan is approved, the deal closes and your on to your next commission. It’s as simple as that!

Here are other examples of where a co-borrower works perfectly to save a deal:

· A recent college grad making a very low starting salary
· A college student who, instead of dorming, wants to buy
· Newly commissioned or self employed borrowers
· Professionals with extremely high student loan payments
· Borrowers with minimal or no credit history

The list goes on and on. The most important thing to remember is that there is a loan out there for virtually EVERYONE. Give us a call and we will make it happen.