VA Loans With Co-Borrowers
There are different types of VA loan applications where the veteran can add another borrower. One is a joint loan, where the vet applies with a civilian co-borrower. Another is a VA loan application where two veterans who are not married apply for a VA mortgage. Military spouses are also able to co-sign a VA home loan.
In each circumstance, the rules are different. First time home buyers applying for VA mortgages often get confused as to the status of their spouses on the loan application, but the VA requirements are fairly simple to understand.
Military members and their spouses are eligible to be listed together as co-borrowers on a VA home loan. It’s one of the few circumstances where the Department of Veterans Affairs offers VA loan terms to a non-veteran or current military member.
When the veteran and the spouse apply together, they are treated equally on the VA loan; compare that to VA mortgages where the military member applies with a civilian who is not a spouse. In those cases the VA loan guaranty is only offered for the veteran’s portion of the loan.
Military spouses must submit to the same credit check and other underwriting requirements as the veteran. That includes listing sources of stable, reliable income plus occupation and employment history. It’s true that any negative information on the spouse’s credit history could be a source of concern, but military families who plan ahead and start working on credit issues at least a year in advance can often address those concerns.
VA borrowers who aren’t married have a few disadvantages compared to a military couple applying for the same loan. When a vet and a civilian apply together on the VA loan, not only does the VA only guarantee the veteran’s portion of the loan but it also stipulates the civilian can’t bear the bulk of the responsibility for the loan.
These joint loans are also unable to be automatically approved by a certified lender–all joint loans must be submitted to the VA for approval first.