Can You Add A Co-Applicant To Your Home Loan?
Getting a home loan is not as easy as you think it is. Some assume that because they are working, getting a loan is instant and assured. Unfortunately, it is not the case as banks and other financial institutions have their own requirements, and standards to follow. Also, some institutions are strict while some are lenient.
When getting a loan, have you thought about getting a co-applicant?
Co-applicants of a home loan serve as co-borrower. This process offers good and not-so-good benefits. To help you decide whether to consider a co-applicant or not, read this article.
Benefits Of Getting A Co-Applicant
There are many reasons why borrowers opt to get a co-applicant to name them, read below:
Most financial institutions give their approval faster to applicants with co-borrowers. Why not? If the main borrower cannot make a payment, they have a co-borrower to run after. This is a good idea if you want the approval of your mortgage to come sooner.
Yes, you can have higher chances of getting a higher mortgage if you have a co-applicant. The assessor will also include the co-applicants financial status when assessing how much they will approve. If you are unsure or not confident about your own income or salary might as well look for a co-applicant that has a higher income or salary than you.
If you are hoping to get a higher mortgage, then this is a good route for you to take.
Drawbacks Of Getting A Co-Applicant
If there are good things about getting a co-applicant, there are also drawbacks you need to consider. Just to give you some of the drawbacks, read below:
You may not be able to get the amount you can really afford to pay
The benefit can also be a drawback especially if you get approved for an amount that is a lot higher than what you can really afford. When you get approved for a higher mortgage amount, you will get tempted on accepting it even without thinking about whether you can pay for it or not. The worse that might happen is your house will get foreclosed because you failed to pay the amortization.
They might have a bad record that may affect you
Good if your co-applicant has a good financial record, but what if they don’t? Instead of helping you to get approval, you will get denied.
Choosing The Right Co-Applicant
Not sure whose co-applicant to get? Read the tips when choosing one below:
Someone you can trust
They are also considered to be the co-owners of the property, hence, you have to make sure that the person you will get as your co-applicant is trusted and someone who won’t take advantage of you, more so of the property.
A family member
It would be a good idea if you will choose a family member to co-apply with you. It can be your spouse, your parents, your siblings, etc.