Finance
Vermont's 'non-occupying co-borrower' arrangement allows:
AA person to obtain a mortgage on a property they will not occupy as their primary residence
BA parent or family member to co-sign a mortgage for a primary resident borrower✓ Correct
CAn investor to obtain an owner-occupied loan rate
DA corporation to co-sign residential mortgages
Explanation
A non-occupying co-borrower (such as a parent) may co-sign a mortgage with an occupying borrower to help them qualify. The non-occupying co-borrower does not live in the property but is equally liable for the debt.
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Key Terms to Know
Debt-to-Income Ratio (DTI)
A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
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