Can I Have A CoSigner For My Mortgage Loan

Dated: 03/13/2018

Views: 274


Can I Have A Co-Signer For My Mortgage Loan?

Can I Have A Co-Signer For My Mortgage LoanLike credit cards or car loans, some mortgages allow borrowers to have co-signers on the loan with them, enhancing their application. However, a co-signer on a mortgage loan doesn’t have the same impact that it might on another loan. Furthermore, it poses serious drawbacks for the co-signer.

Mortgage Co-Signers

A mortgage co-signer is a person that isn’t an owner or occupant of the house. However, the co-signer is on the hook for the loan. Typically, a co-signer is a family member or close friend that wants to help the main borrower qualify for a mortgage. To that end, he signs the loan documents along with the main borrower, taking full responsibility for them.

When a co-signer applies for a mortgage, the lender considers the co-signer’s income and savings along with the borrower’s. For instance, if a borrower only has $3,000 per month in income but wants to have a mortgage that, when added up with his other payments, works out to a total debt load of $1,800 per month, a lender might not be willing to make the loan.

If the borrower adds a co-signer with $3,000 per month in income and no debt, the lender looks at the $1,800 in payments against the combined income of $6,000, and may be much more likely to approve it.

Co-Signer Limitations

Co-signers can add income, but they can’t mitigate credit problems. Typically, the lender will look at the least qualified borrower’s credit score when deciding whether or not to make the loan. This means that a co-signer might not be able to help a borrower who has adequate income but doesn’t have adequate credit.

Risks of Co-Signing

Co-signing arrangements carry risks for both the borrower and the co-signer. The co-signer gets all of the downsides of debt without the benefits. He doesn’t get to use or own the house, but he’s responsible for it if the mortgage goes unpaid.

The co-signer’s credit could be ruined and he could be sued (in some states) if the borrower doesn’t pay and he doesn’t step in. For the borrower, having a co-signer adds an additional level of pressure to make payments since defaulting on the loan will hurt him and his co-signer.

As always, it’s a good idea to speak with your trusted mortgage loan professional for advice in your specific situation.

For More Info Visit: http://www.bondstreetloans.com

Latest Blog Posts

Real Estate Tops Gallup Survey Of Best Long Term Investment Again

Every year, Gallup conducts a survey of Americans to determine their choice for the best long-term investment. Respondents are asked to select real estate, stocks/mutual funds,

Read More

What The Experts Are Saying About The Economic Slow Down

More and more economists are predicting a recession is imminent as the result of the pullback in the economy caused by COVID-19. According to the National Bureau of Economic Research: “A

Read More

How Coronavirus Affects The 2020 Real Estate Market So Far

What Is Coronavirus?COVID-19, better known as coronavirus, is a viral infection with flu-like symptoms. The virus is primarily transmitted via respiratory droplets, such as when an infected

Read More

Now Is The Time If You Are Considering Selling

The housing market has started off much stronger this year than it did last year. Lower mortgage interest rates have been a driving factor in that change. The average 30-year rate in 2019,

Read More