When it comes to obtaining a VA loan, veterans and active duty service members can benefit from the advantages offered by this government-backed mortgage program. However, in some cases, these individuals may need a co-signer to help them secure the loan. Cosigners play a crucial role in the loan application process by providing additional support and assurance to lenders. If you’re considering applying for a VA loan and wondering who can cosign on such a loan, this article will provide you with the insight you need.
1. Spouse or Domestic Partner
One of the most common options for a VA loan cosigner is a spouse or domestic partner. If you’re married or in a domestic partnership, your spouse or partner can cosign the loan application with you. This means that both of your incomes and credit histories will be considered during the underwriting process, potentially increasing your chances of approval and securing more favorable loan terms.
Having a spouse or domestic partner as a co-signer can be especially helpful if you have a lower credit score or limited employment history. Lenders will evaluate both of your financial situations to determine your eligibility and calculate the loan amount you can qualify for. It’s important to note that if your spouse or partner has a poor credit history or significant debt, this could negatively impact your chances of approval.
2. Another veteran or service member
If you can’t find a spouse or domestic partner to cosign your VA loan, another viable option is to have another veteran or active duty service member cosign with you. Having a fellow service member cosign can be beneficial because they understand the unique circumstances and challenges that military members face. In addition, their military income and benefits can be considered in the loan qualification process.
When considering a fellow veteran or service member as a co-signer, it’s important to make sure they meet the eligibility requirements for a VA loan. They should have a valid Certificate of Eligibility (COE) and meet the minimum service requirements set by the Department of Veterans Affairs (VA). The co-signer’s credit history and income will also be evaluated, as they will share the responsibility of repaying the loan.
3. Family Members
Another option for cosigners on a VA loan is a family member. Family members, such as parents or siblings, can cosign the loan application to help you qualify for the loan or secure more favorable terms. This can be especially beneficial if you have a close family member with a strong credit history and stable income.
When considering a family member as a cosigner, it’s important to establish clear communication and expectations. Both parties should fully understand the financial obligations and responsibilities associated with cosigning a loan. It’s also important to consider how this arrangement may affect family dynamics, as financial matters can sometimes strain relationships.
4. Non-Resident Co-Borrower
If you can’t find a suitable co-signer in your immediate family, you may want to consider a non-occupant co-borrower. A non-occupant co-borrower is someone who is listed on the loan application but does not intend to live in the property being financed. This person’s income, assets and credit history will be considered during the loan qualification process.
Non-occupant co-borrowers can be friends, colleagues or even business partners who are willing to help you secure a VA loan. However, it’s important to carefully evaluate the relationship and make sure both parties understand their obligations and responsibilities. Keep in mind that the non-occupant co-borrower’s financial situation will be closely scrutinized by the lender, as they will be equally responsible for repaying the loan.
5. Other Considerations
When selecting a cosigner for your VA loan, it’s important to consider several factors beyond their willingness to help. Lenders will evaluate the cosigner’s credit history, income stability, and debt-to-income ratio. They will also evaluate their ability to repay the loan if you, as the primary borrower, are unable to meet your obligations.
In addition, keep in mind that the cosigner will be making a
Who can cosign on a VA loan?
Only certain individuals are eligible to cosign on a VA loan. The following parties can act as cosigners:
- Spouse: If you are married, your spouse can cosign on a VA loan with you.
- Another veteran: Another veteran who has VA loan entitlement can cosign on a VA loan.
- Active duty service member: An active duty service member can cosign on a VA loan.
- Reservist or National Guard member: Reservists and National Guard members who meet the eligibility criteria can cosign on a VA loan.
- Surviving spouse: In certain cases, the surviving spouse of a deceased veteran may be eligible to cosign on a VA loan.
Is a cosigner required for a VA loan?
No, a cosigner is not required for a VA loan. However, having a cosigner can be helpful if the primary borrower does not meet certain eligibility requirements, such as having a low credit score or insufficient income.
What are the responsibilities of a cosigner on a VA loan?
When someone cosigns on a VA loan, they are assuming responsibility for the debt if the primary borrower fails to make the required payments. The responsibilities of a cosigner typically include making mortgage payments if the borrower is unable to do so and fulfilling any other obligations outlined in the loan agreement.
Can a non-veteran cosign on a VA loan?
No, a non-veteran cannot cosign on a VA loan. The cosigner must meet the eligibility requirements set by the Department of Veterans Affairs (VA), which typically include being a spouse, another veteran, an active duty service member, a reservist or National Guard member, or a surviving spouse of a deceased veteran.
Can a cosigner help increase the loan amount on a VA loan?
No, a cosigner does not directly increase the loan amount on a VA loan. The loan amount is determined based on the borrower’s eligibility and the VA’s maximum loan limits. However, having a cosigner with a strong credit history and income can potentially help the primary borrower qualify for a larger loan amount by improving their overall creditworthiness in the eyes of the lender.