Do I Need A Co-signer On A Mortgage Loan? How Do I Choose Who Should Cosign?


I want to teach you a little bit about co-signers for a mortgage loan.

A lot of times, people don’t have enough income to qualify for a loan. In these cases the loan advisor will ask for a cosigner, also called a co-borrower. It could be that they only need a little bit more to be approved for the loan amount and the home that they want. They may just be a few hundred dollars a month short and need somebody who only works part-time and makes minimum wage to co-sign.

Luckily, Fannie Mae and Freddie Mac loans (often called conventional and FHA loans) allow for a co-signer. However, there are some special conditions on how to add the income and debts.
• They do not have to occupy the residence to co-sign
• Must have qualifying credit
• Qualifying debt to income ratio

In most cases, if their credit is acceptable and their debt ratio is good, adding a co-signer can make all the difference in the qualification.

Choosing The Right Co-signer

So it’s okay to bring me somebody that you know and trust. They need to place their trust in you too – that you will make the payments on time and not damage their credit.

Make sure they have decent credit. So it’s best not to bring me cousin Charlie who’s never paid a loan on time in his life or who has a worse FICO score than you. Bring me somebody just like you. Someone who has a job reasonable credit and we can add their income on top of yours.

I’m often asked about the co-signer being removed. After you have made six payments, if you can now qualify with your income, credit equity, etc. and no longer need the co-signer, you may refinance the loan out of their name and into yours only.

So a Co-signer might just be the key!

Call me, Chris Trapani and I’ll help you Fire Your Landlord®