Profile picture for Swissvale97

cosigner

My wife and I have a sales agreement on a home, but are worried about our back end ratio (my student loans and credit card debt) preventing us from getting the financing we need... To circumvent this we were considering the scenario of her being the primary borrower with my mother (excellent income to debt ratio) cosigning on the loan.  We were told by our mortgage adviser that this isn't an option that banks are allowing.
I thought this was a pretty common thing, and on several bank websites, the FAQ says that this is permissible.
Have things actually changed?
  • January 14 2010 - Pittsburgh
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Answers (7)

If it is a single family FHA will be fine with that if it is conventional you may have a harder time but I believe Freddie still allows a non owner occupant coborrower.
  • January 14 2010
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Profile picture for Swissvale97
thanks, but I was under the impression that a FHA loan took long to process and could only be applied to previously designated properties.  What are the income requirements for these, how much income is too much to qualify?
  • January 14 2010
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No income restrictions.

Allows as little as 3.5% down.

No pre-designation.
  • January 14 2010
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Profile picture for Scott Loper
I have a buyer use this technique (mother as a cosigner) this past November.  It was an FHA loan that closed in just over 30 days.  The particular bank, however, did require that the buyer's mother be on the deed and not just cosign the mortgage.
  • January 15 2010
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Scott,

Anytime someone is obligated on the note the lender is going to require they be on the deed otherwise they do not have an ownership interest in the collateral that the loan is being made on.
  • January 15 2010
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Profile picture for SunTrust
FHA does allow co-signers.

The difference between a co-signer and a co-buyer is that co-signers don't go on the deed and co-buyers do go on the deed.
  • January 15 2010
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I stand corrected you can be on the note and not on the deed and mortgage....Personally I would never agree to that....I am obligated to the debt but have no ownership interest...I would at least want to be on the deed until the mortgage is paid off or refinanced without me on the Deed...But that's me!
  • January 15 2010
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