Every Monday Morning at 8:15am, join me on my Facebook page as I sit down with a local lender, and do a live interview and talk about a Mortgage Tip that may help YOU with your next Real Estate Purchase.
This morning I sat down with Stacy Himley from Guaranteed Rate. In this episode, Stacy highlighted a few reasons why a co-signer can't help you get a mortgage if you have poor credit. You can reach Stacy at 605.605.690.2305 or Stacy.Himley@rate.com Her office is located at 304 4th St Brookings SD, 57006 or on the web at www.Rate.com/StacyHimley
Poor Credit and Co-Signers
- Alright here we go. Good morning everybody, Shane here from the Brookings Home Team powered by Century 21. Got Stacy here from Guaranteed Rate this morning to go over our Monday morning mortgage tip. We took the week off last week, we had a sick individual and -
- Tis the season.
- And plan B didn't work out either. But we're back now. Now next week, before I forget, is President's day, so Monday we will not be on but Tuesday morning we'll be back. With that being said, Stacy what do you have for us today?
- Well good morning, I wanted to talk today about when you're applying for mortgage and sometimes things don't work out. Maybe it's a credit issue, maybe it's a debt to income ratio's too high, things like that. A lot of time the response we get is well I'll just have so and so co-sign; friend, relative, loved one, someone. And it comes up a lot and it seems like it should be a really easy fix, and it's not. Some programs don't allow a non-occupant co-borrower, somebody that's not gonna live in the home, to be on the loan. Some do. If it's a credit issue, that never works just to add a co-signer. The reason is, so when you apply for a mortgage, lenders use a tri-merge credit report. We're getting in the weeds here a little bit but, which means they pull from all three bureaus. So each person, if you and I were buying a house, and doing a mortgage together, they would take my three scores and your three scores. The middle score for you and the middle score for me, and then the lower of the two. That's just how the industry works. So if you're credit is not where it needs to be, adding a co-signer isn't an answer because it's still gonna have your worst credit score on there. If it's debt to income ratio, that sometimes is a different story. But there's ways to fix credit, I know that's been a tip before too. Sometimes time is the only thing that will cure some of that. Which is the most frustrating because people aren't patient nowadays. So co-signing is a little bit different beast, sometimes it works and sometimes it doesn't. I usually encourage the parent, if it's a parent, that there's other ways they could help out instead of co-signing on a 30 year commitment. Maybe they could help pay something off, maybe they could gift them money down, something that's not quite such a long term forever commitment.
- Commitment, yeah, we were talking offline here and yeah, unfortunately, if that person defaults then you, as a co-signer, you're responsible now.
- And sometimes you don't know. That was one of the worst, we all have those moments where it's like, oh I hope I never run into that again. A couple had come in to refinance, or do some financing, and come to find out there was a mortgage reporting on their credit that was really bad, like eight months past due. And so when I said, do you own another property? He's like, no, then I kind of had to jog his memory, and oh gee it was the mortgage they co-signed for their daughter. Well as a co-signer, sometimes you don't even get the statements, a lot of times, it just goes to whoever. I got to break the news to him that he had a really bad mortgage on his credit. And he didn't, it was just a bad deal. But and so it did, and now the dad's credit's ruined for a long time, cause it takes a long time to make that up. So, there's other ways that parents can help, or aunts, uncles, grandpas, whoever, in other ways other than just co-signing.
- Perfect, alright, great information. You said you've had a couple of those questions this past week and our team had that too here in the last week. So that's about perfect timing for that.
- So if you have anymore questions about that or would like to talk to Stacy more in depth in that please give her a call. Again, all of her information is on the top, on the bottom, on the sides, wherever your device allows you to see that. So feel free to reach out to her. And if you have questions or anything other than that, our team of course, will be happy to talk to you as well. So that is this week's Monday morning mortgage tip. And before I leave, a shout to you, happy birthday.
- Oh thank you!
- So it's Stacy's birthday today.
- Yes, thank you.
- If you're seeing this today be sure to still message her.
- We won't disclose ages here.
- Age is just a number.
- We're in non-disclosure right now.
- Yeah, full non-disclosure.
- So happy birthday Stacy.
- Thank you.
- And again, thanks for watching everybody, feel free to share and tag this video with anybody else that you feel would benefit from it as well and we're always here to answer your questions. So again, we'll be back next Tuesday because Monday's Presidents Day. So thanks for watching, have a great week, we'll see you guys later.
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