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What is better co-borrower with not so great credit or no co-borrower at all?

by EmilyLin12 from Austin, Texas. Jun 14th 2010 Reply


Nic Netherton (ColoradoLender)
#17 ranked lender in Colorado - 57 contributions

Depends on what the reason for the need for a co-signer. If it's to provide sufficient income to qualify and they have at least a 620 it's better to have the co-signer. Shoot me an email at netherton@nc-mc.com and we can analyze your situation to see what would work best.Nic

Jun 14th 2010
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Martin Farris, CFP (Martin)
#36 ranked lender in Texas - 16 contributions

If you don't need the co-borrower to qualify, it would be better to leave them off. The credit score used will be the lower of the borrower's and co-borrower's, and if the co-borrower's score is too low the loan will be denied. If the program you are using is priced based on credit score, then you could wind up paying much more because of the co-borrower then you would without them. The only reason for leaving a co-borrower with marginal credit on a loan is if you need the income to qualify.

Jun 14th 2010
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Gregorio Denny (GVDenny)
#255 ranked lender in California - 380 contributions

The credit score of the co-borrower makes absolutely no difference at all unless it's lower than yours. The only thing a co-borrower brings to the table is more income to help DTI ratios. A co-borrower cannot negate bad credit or make someone qualify that would not on their own. If your co-borrower qualifies and adds income without having a score so low it changes your rate, then use them. If their score is low, but qualifies and they bring income to help you qualify, consider using them. If they have an 850 credit score and no income, they serve no purpose.

Jun 14th 2010
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Chuck Fleischer (ChuckFleischer)
#41 ranked lender in Texas - 1 contribution

How is the primary borrower's credit?

Jun 14th 2010
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Richard Woodward (RichardWoodward)
#39 ranked lender in Texas - 106 contributions

Every loan is unique so there is no black or white answer. However, if the co-borrower has credit scores below the quideline requirements, then no co-borrower would be better. I would be happy to address your individual file should you want to apply. I look forward to helping you.Richard

Jun 14th 2010
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My co-borrowoer's score is about 610.

Jun 14th 2010
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Bob Wilson (Bob Wilson)
#163 ranked lender in California - 9 contributions

What loan program are you looking at doing? We have some that will use alternative types of credit and it is a Govt. subsidised program. Check out our web page and give me a call. www.financialaccessinc.net

Jun 14th 2010
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