What is a non-borrower on a loan?
For our purposes, a “non-borrower” is an individual who resides in your home and contributes to the household income but is not personally obligated on your mortgage loan. As part of the evaluation process, a Credit Authorization Form must be completed and signed by each non-borrower.
Can a non-borrowing spouse be on purchase contract?
Yes. There may be individuals on the sales contract that will have an ownership interest in the property, but will not be on the loan application and note.
Is a non-borrowing spouse protected in a reverse mortgage?
Essentially, eligible non-borrowing spouses occupy the home, are protected by “due and payable” deferral provisions, and have their age included in the reverse mortgage calculation of the borrower’s principal limit.
What is non-borrower household income?
∎ Non-Borrower Household Income. – These are people who live in the house who will not be borrowers on the mortgage. – Permitted as a compensating factor in to allow a Debt to Income (DTI) ratio >45%, up to 50%
What is a non-borrowing individual?
A non-borrowing spouse is the spouse not listed as a borrower on the Home Equity Conversion Mortgage (HECM) or reverse mortgage contract. Whatever the reason, it is vital that the non-borrowing spouse be designated as such on the loan contract.
What does non-borrowing spouse mean?
Non-Borrowing Spouse means the spouse, as determined by the law of the state in which the spouse and Borrower reside or the state of celebration, of the Borrower at the time of closing and who is not a Borrower of the HECM loan.
Can someone be on the loan but not the title?
Legally, at least one borrower must be on the title deed to qualify for a mortgage loan. However, most mortgage lenders prefer that all borrowers appear on the title. However, mortgage borrowers that are not on the title deed become guarantors, not co-borrowers.
What documents are typically signed by the non-borrowing spouse?
Non-borrowing spouses are required to sign the Mortgage, CD and Right of Rescission (if applicable).
Does HomeReady count household income?
HomeReady is exactly like other mortgage programs in that borrowers can use employment income, commission, bonus, and even tip income to qualify. Home buyers can use income of household members who will not be on the loan. The non-borrower’s income must be used as a compensating factor – not for qualification.
What is a boarder salary?
Answer: This type of rental income IS known as Boarder Income. The HomeReady program allows up to 30% of your total qualifying income to come from Boarder Income, but there are strict requirements that must be met to qualify for a Home Ready loan and for using Boarder Income.
What does non borrower mean?
When two or more people are purchasing a property, one or more of them may not be financially obligated to repay the loan. A person who is an owner but does not have an obligation to repay the loan is sometimes referred to as a “non-obligor” or “non-borrower.”