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Question about co-signers on mortgage loan

Would it help to have a co-signer if applying for a mortage?  I can't prove my income because it is a home-based business.  My husband makes decent income, but because of our current debt to income ratio, his income is short of what the bank wants to see.  They suggested we pay off our two vehicles that only have about a year worth of payment left on them and/or pay off a large chunk of our credit card debt to lower that.  We are considering doing that, but we are wondering if we got a co-signer, would their income be taken into consideration and perhaps we could get the loan that way?  We are trying to move quickly, as we have our eye on a foreclosure we want to bid on. Thank for any input!

  • February 02 2009 - Baltimore
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Answers (6)

Profile picture for jenmopo
No need to shout Novatopro...I can hear you loud and clear.  Thanks for you wonderful and insightful answer!  Wow, I never thought of that! 
  • February 04 2009
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PAY YOUR BILLS OFF BEFORE YOU EVEN THINK OF BORROWING MORE MONEY!

  • February 04 2009
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Well, I know this is really a wild eyed suggestion, but you could try being financially responsible, and paying down a bunch of debt before buying a home... You should have zero credit card debt, and ideally no car debt, plus 20% for a downpayment. SInce the market is spiralling down, your home you want will just get cheaper in the meantime

Roberto...I appreciate your attempt at a response to my question, however, I did not ask for advice on my financial responsibilities. My question was about co-signers.  Your advice that I should have zero credit card debt and no car debt is incredibly insightful and something I have never thought about, thanks for that tid-bit of advice.  The home I am seeking to purchase may continue to get cheaper, yes.  Or, someone else will take advantage of the deal.  I have been looking at homes for the past two years, so this is not some rash decision and I am not seeking to purchase my next home with the mindset it will make me money...I am looking for my next family home, much like I did for the home I currently own, but have outgrown.  FYI, the credit card debt we have was due to our business that we had to close and it will be paid off in the next 6 months to a year.  I have found the perfect home for my family, at an excellent price, that is why I do not want to wait on this purchase.  As for your implication that I am not financially responsible, why don't you stick to answering people's questions as asked and avoid being viewed as arrogant, such as in this case, Roberto? To everyone else, thank you for your suggestions and advice, I appreciate your responses.
  • February 03 2009
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FHA permits non-occupant co-borrowers.


A non-occupant co-borrower is a person who will not occupy the property, but is being added to the loan application to strengthen the profile is permitted.  Maximum financing is available under the following conditions:


- The non-occupant co-borrower must be a close family member or demonstrate a long-standing family relationship with the primary Borrower. If no such relationship can be verified, then the loan amount cannot exceed 75% of the purchase price.
- The subject property has to be a single family detached home, PUD, or an approved condo unit.
- The non-occupant co-borrower must have a primary residence in the US.
- A complete credit underwriting analysis will be performed for the non-occupant co-borrower. The income, assets and debt will be included in the loan information and will be weighed equally with the borrower.

  • February 03 2009
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Well, I know this is really a wild eyed suggestion, but you could try being financially responsible, and paying down a bunch of debt before buying a home... You should have zero credit card debt, and ideally no car debt, plus 20% for a downpayment. SInce the market is spiralling down, your home you want will just get cheaper in the meantime.
  • February 02 2009
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i don't know all of the ramifications of that but here are some . the co-signer has to be able to afford the mortgage on their own because the bank will expect payment from them if you fail. therefore their credit and debt to income ratios will have to pass. also that debt will go against their credit.
of course if they have a lot of money and can pass and don't have credit concerns then the only thing that might stop you is the old addage of not doing business with friends and relatives. i'm taking a wild stab at it and guessing the co signer is one of those.
good luck
  • February 02 2009
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