How to Get a Mortgage With a Co-Signer

by Lisa McQuerrey ; Updated July 27, 2017

If you can’t qualify for a mortgage on your own merits, a co-signer may be able to use her income and credit score to boost your borrowing power.

Why You Might Need a Co-signer

If a mortgage lender says you need a co-signer for your loan, chances are your credit is poor, your income is too low or your debt-to-income ratio is too high. This means the lender doesn’t think you’re a good risk on your own, but he may be willing to fund you if you have a co-signer, or someone with a good income and good credit history who is willing to take on the responsibility of paying the mortgage if you are unable to.

Tips

  • The ability to use a co-signer at all varies from one lender to another. If you're applying for a Federal Housing Administration loan, your co-signer will have to be a close blood relative.

Co-Signer Requirements

A co-signer will be subject to the same underwriting considerations as a primary borrower. The lender will want to evaluate the co-signer’s other financial obligations, credit score, income and outstanding debt. The lender will consider the combined creditworthiness of you and your co-signer in determining how much to lend, along with interest rate and other loan terms and conditions.

Warnings

  • Your co-signer's income is more important than her credit score when it comes to qualifying.

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Who Should Co-Sign?

A co-signer isn’t typically someone who will occupy the house being funded; a husband wouldn’t normally co-sign for a wife who's sharing the property, for example. A co-signer is more likely to be a financially stable close relative of one of the occupants.

Some lenders will require that a nonoccupant buyer be a blood or legal relation to the primary buyer or that the parties have a documented long-term relationship. Asking someone to take on the role is a significant request. If you default on your loan, your co-signer is on the hook for your mortgage payments, which could present a significant financial hardship to this person. Consider possible ramifications and the impact such an event could have on your relationship with a co-signer before you ask.

About the Author

Lisa McQuerrey has been an award-winning writer and author for more than 25 years. She specializes in business, finance, workplace/career and education. Publications she’s written for include Southwest Exchange and InBusiness Las Vegas.

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