Mortgage loans accessible through the Department of Veterans Affairs are brilliant mortgage option for current active-duty and veteran service members, National Guard troops and the surviving spouses of service members. VA mortgage loans are upheld by the United States federal government and offer a variety of attracting advantages and mortgage options including no required down payment. Automatically, you’ll be qualified for a VA loan if both you and your spouse are service members, imagine a scenario where you are a service member and your spouse is a stay at home parent. Or if you are a veteran and you might want to buy a home with your long-term partner who is a civilian? If you are hoping to meet all requirements for a VA loan with a co-signer who isn’t eligible themselves for a VA loan, can you still obtain a VA mortgage loan together?
Mortgage co-signer and what are the benefits of having a co-signer on your mortgage loan
Co-signers or co-borrowers are individuals who agree to purchase property with you – and agree to be in charge of the mortgage monthly and/or any default on the mortgage. Many homebuyers need or want a co-signer: co-signers can use each other’s credit score and income to qualify for a home at all or to qualify for a bigger or expensive home.
Who can co-sign on a VA mortgage loan?
The legally married spouse of a military service member or veteran can co-sign on a VA loan with no penalty and with no additional red tape, restrictions or requirements. In these cases, the VA loans will still be 100% ensured and sponsored by the government.
When two unmarried individuals co-sign onto a VA mortgage loan and only one is an eligible individual (i.e., a service member, veteran or the surviving spouse of a veteran), the VA loan guarantee will be restricted to the amount of only the eligible individual’s interest in the home.
The drawback of these loans, and the way that the government will only back a percentage of the loan opposed to sponsorship the whole loan, is that you will most likely be required to put down a down payment on your mixed-eligibility VA mortgage loan despite the fact that down payments are not required under traditional VA loans. Putting down cash, perhaps as much as at least 12% of the value or sale price of the home causes the lender to balance out the risk they are taking on writing a mortgage loan that’s not completely backed by the Department of Veterans Affairs.
Some VA lenders won’t process or permit these types of mixed-eligibility mortgage loans, so you’ll need to call around to experienced VA lenders if this is the circumstance you and your prospective co-signer are in.
VA loans offer many advantages and benefits that are not offered on FHA loans or conventional home mortgage loans. An experienced lender can help get you on the way to home ownership today!