No. You can apply for a mortgage using only the strength of your own credit. You may want to apply individually if your spouse has a poor credit history. However, you may qualify for a higher balance if you both apply together since lenders consider the income of both applicants when approving a mortgage.
The potential risks of co-signing an auto loan
If the primary borrower doesn't make their monthly loan payment, you will be asked to make the payment. Any missed payments could also appear on your credit reports and impact your credit scores, making it harder for you to get credit in the future.
However, the primary borrower is the one to typically complete the loan application first and thus serves as the main point of contact for the loan. For both borrowers, the lender considers income, credit history and financial stability as crucial factors for loan approval and terms.
Yes, removing someone from a mortgage is possible, but the most common method is refinancing the loan solely in the name of the person who will retain ownership of the property. This involves obtaining a new mortgage that pays off the existing one, releasing the other party from their obligation.
The short answer is yes. However, while it's possible to remove a co-borrower from your mortgage — if you get a divorce, for example — the process can be somewhat challenging.
While refinancing is the most straightforward and obvious way to remove a person from a mortgage, that option isn't always available or optimal. Doing so without refinancing is possible via mortgage assumption, loan modification or even bankruptcy.
The Federal Housing Administration (FHA) mandates that borrowers must occupy the property as their primary residence for at least one year. Lower credit scores may qualify for FHA financing, which typically requires a higher down payment. This 12-month period begins from the date of closing.
Cosigners can take the primary borrower to court if the primary borrower fails to repay the loan or otherwise fails to fulfill the terms of their agreement. As you learn about getting a cosigner, you'll see that they can help you get a loan you may not otherwise qualify for.
There are three prevailing theories of mortgage default: strategic default (driven by negative equity), cash-flow default (driven by negative life events), and double-trigger default (where both negative triggers are necessary).
To be safe, the general rule of homeownership comes down to whose names are listed on the title of the home, not the mortgage.
A lien is created as soon as you finance a car. In most states that means the lender holds the car's title and is considered the vehicle's legal owner until the loan is paid in full. The lien protects the lender and allows them to repossess the car if the borrower stops making payments.
Generally, lenders will consider the credit score of all applicants applying for a loan.
When evaluating borrowers for a joint mortgage, the lender cares less about who is listed first, and more about the sum of the applicants' earnings and debts. In general, the lender evaluates the application the way the applicants submit it, without regard to whose name is listed first.
In a visa application the primary applicant is the person seeking to satisfy the primary criteria for grant of the visa, while secondary applicants are members of their family unit such as their spouse or de facto partner and/or dependent children.
Ownership Rights: A crucial difference between a co-signer and a co-borrower relates to the ownership of the vehicle. A co-borrower, also known as a joint applicant, shares equal ownership rights of the car with the primary borrower. They have legal authority to use the vehicle as they please.
However, if the primary borrower defaults and the co-signer doesn't step in to pay, the co-signer is held responsible, and their credit score may suffer. Co-owners, on the other hand, are equally responsible for the loan from the start. If payments are made on time, both parties' credit scores can improve.
Ending a Cosigned Car Loan. As the cosigner, you can't remove the primary borrower from the loan. Unfortunately, since you have no legal rights to the vehicle, the primary borrower has to take the initiative to remove someone's name from the contract.
In other words, if you wanted to get in the car and drive away with it, you'd have the right to do so, since (presumably) you're the owner of the car as well (this does not apply if you're only a co-signer on a loan). You could also take the co-signer to court for financial damages.
A property is considered a primary residence if it meets the following criteria: Occupied by the borrower for at least six months out of the year and the address of record for taxes, voter registration, etc. Located within a reasonable commuting distance to the borrower's place of employment.
The property you purchase can be classified as a primary residence, a secondary residence or an investment property. The difference between these three is important to know when buying a house. How your new home is classified could end up saving or costing you a lot of money.
The Bottom Line. Renting your house can provide a reliable source of income, but make sure you do it legally. Don't try to rent out your house without telling your lender because you may be committing a crime if it goes against your loan's terms.
Rights of co-borrowers
All areas of the property are accessible to each individual. Also, each owner decides who receives her share of the property when she dies. So not all owners will receive their share. The other co-owners must consent to the sale of an owner's share.
Selling a property with your name on the deed but not on the mortgage creates added levels of complexity and requires more collaboration with third parties. However, you can achieve a successful sale with careful planning and the right support.
There are two ways to remove a divorced partner from a mortgage: obtaining a release of liability from the lender or refinancing the mortgage. A release from liability is easier, but counts on the lender granting permission.