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what's up everyone i hope all is well today matt garland here in mls number 58700 but better known as mg the mortgage guy so look guys today we're going to talk about cosigners and non-occupied co-borrowers all right so i get a lot of questions every single day via text message dm email even on our pre-approval calls right folks are always wanting to know um especially if they can't qualify for a particular property on their own is can they add someone else to the mortgage um to help them qualify now the answer to this question is absolutely you can right you can always add a co-borrower who's going to live in the property with you especially if you're going with a primary residence in this video matter of fact let me just specify that right now this video is if you are looking to purchase a primary residence this video is not for investment properties um doesn't matter if you're a first-time home buyer or your move-up buyer you're downsizing um this is just particularly for folks who are looking to add someone else to the mortgage to help them qualify now like i was saying you can have a co-borrower who's going to live in the property but the most common ways for us to structure um your loan is to use a cosigner or a non-occupied co-borrower so look first of all let's go to the definition so i'm gonna show you guys my screen real quick all right a cosigner um are credit applicants who do not have ownership interest in the subject property as indicated on title they are required to sign the mortgage or the deed of trust note they have joint liability for the note with the borrower and they do not have any interest in the property sales transactions such as the properties they're not the property seller they're not the builder or they're the real estate broker all right so this is what a cosigner is now let me break this down a little bit more for you guys the cosigner again is a credit applicant they do not have ownership of the property okay they they are not a owner of that home they are helping you to buy all right they're signing a mortgage and a deed and a trust because they they're taking a financial responsibility for the home but they're not taking legal ownership all right now a non-occupant co-borrower is is a credit applicant on principal residents only again principal equals primary residents who do not occupy the subject property all right they may they may not have ownership in the subject property as indicated on title uh they are going to sign the mortgage or the d to trust a note they have joint liability for the note with the borrower and again they do not have any interest in the property sales transaction such as they're not the seller they're not the builder or the real estate broker so here's the difference between this all right a non-occupant co borrowers right the main thing of this is they can either have interest in the property or not have interest in the property all right and again obviously it's not an owner occupant so they're not going to have ownership i mean live in the property but you can kind of choose if you want them to have ownership in the property or not all right so let's go to a quick example of when you guys would use a non-occupant co-borrower to help you qualify for a mortgage right so we have a borrower right here their income is four thousand dollars a month they have their liabilities at two thousand sixty dollars a month so as they're trying to purchase their home this home in this example their dti is too high they had a 51 and a half percent back in so now if you add the non-occupant cobalt well who makes about fifty five hundred dollars a month um they have eighteen hundred dollars of their own liabilities now when you add the income plus the debt right now that brings that dti down to a 40.63 which would make them um eligible all right so in this situation this non-occupant co-borrower was able to help them get approved for this mortgage now when can the one of the most common questions that i'm i'm always getting in this scenario is if someone is going to cosign or be a non-owner-occupied property how would that affect them in the long run if they wanted to refinance their property or purchase more real estate in their personal name will this mortgage debt hurt them from qualifying the question to that the answer to that question i should say is absolutely not if you do it the right way now you have to make sure you as the borrower are making the monthly payment on your out of your own bank account all right um if you have a parent that's co-signing or being a non-occupant co-borrower do not have a joint account and have that mortgage paid um out of that account set up their own separate mortgage account in your name they have nothing to do with it and then make the payments from there all right so when a borrower is obligated to a mortgage debt but it's not the party who's actually repaying the debt the lender may exclude the full monthly expenses principal interest uh taxes insurance or homeowners association dues from the borrower's recurring monthly obligations if that party like i said is making the payments that's obligated on the mortgage debt there are no delinquencies in the past 12 months on that property and the borrower is not using any rental income from that property to help them qualify for this new property so again guys um you got to make sure you don't hurt your cobar you're not occupied co-borrowers our co-signers you don't want to mess them up in the future all right so you got to make sure you're paying your mortgage on time and you have to make sure you're paying it out of your own account in order for them not to be affected by your mortgage payment all right so look this tuesday 1 p.m eastern standard time i'm hoping holding a special class for eylu members all right we're going to be breaking down closing costs i'm going to go through everything from discount points title fees transfer taxes sellers concessions how do you know if you're getting a good deal or not this class is happening tuesday 1 pm eastern standard time exclusively for eylu members and if you guys want to become a member today make sure you click that link in the bio and make sure you use my annual promo discount code e-y-l-m-g e-y-l-m-g and say 40 off the price again this is matt garland in mls number 58700 but i'm better known as mg the mortgage guy peace