non-occupant co-borrower for refi

[Brian C.]

My friends are retired and no longer have steady reported income but they do have a free and clear 900k house in California and perfect credit. In trying to help them get a cash out refi I was thinking of suggesting a non-resident co-borrower to help them qualify for the loan. Any issues to look out for? Would they need to be family related only?

Thanks in advance

[Chris Mason]

Hi @Brian C.,

If you put some other person on that mortgage with the owner occupants, you're likely trashing that person's mortgage-calculated DTI, and negatively impacting their ability to buy a home. If that 'friend of a friend' is actually you, and you're interested in REI, I'd suggest against it.

The good news, however, is that most forms of retirement/pension/ssn/etc income counts as qualifying income. Some of that "retired person income" can even be counted at 125% of gross value because it is not taxed.

Retired people get mortgages all the time. Your primary job as a friend will likely be to help them through the technological aspects, if like many retired persons they have not kept up on it all. The mortgage industry in 2016 practically assumes that everyone is tech literate, can docusign, checks their email daily, can scan to pdf, etc etc.