A co-signer is a mortgage loan applicant who co-applies with a home buyer to help the buyer qualify for their mortgage. This co-applicant is typically a family member who does not plan to occupy the property the home buyer is purchasing, and is therefore labeled a non-occupant co-borrower (or co-signer).
Adding a co-signer to a mortgage application is for one specific purpose, which is to consider the co-signer’s income in qualifying. This allows us to help a buyer qualify for a higher mortgage payment and therefore a higher purchase price.
Both applicants incomes and debts are considered together in determining the debt to income ratio. Learn more about calculating the debt to income ratio and what this means.
It is possible for a co-signer to be an applicant on the mortgage and a co-owner of the property. Or the co-signer can solely be on the mortgage but not be an owner of the property. It’s up to the applicants to decide what’s best for them.
A co-signer will go through the same process to pre-qualify as will a home buyer. They provide documentation for their income, assets, debts, and housing expenses. And so the list of items they’ll provide is typically similar to the home buyer, plus documenting their current housing expenses.
The co-signer will need to attend settlement or under our direction provide the home buyer with the power of attorney to sign on their behalf.
The co-signer will be co-obligated to repay the mortgage and so will therefore be interested in the buyer’s ability to make the mortgage payments on time and in full.
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