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There are times when we need a little help getting started in life. Doing something like adding your child’s name to your credit card can help them build credit quickly if you pay it off every month.

It’s a big decision to cosign a loan for someone because you’re taking on a lot of responsibility if things go south. If you’re the one getting a mortgage with a cosigner, there are factors and restrictions that go along with the transaction.

The Responsibilities of Being a Cosigner

Cosigning can really help someone out, but it’s also a big responsibility. When you cosign for someone, you’re putting your name and credit on the line as security for the loan.

If the person you cosign for misses a payment, the lender or other creditor can come to you to get the money. The late payment also shows up on your credit report.

Because cosigning a loan has the potential to affect both your credit and finances, it’s extremely important to make sure you’re comfortable with the person you’re cosigning for. You both need to know what you’re getting into.

Applying for a Mortgage with a Cosigner

Let’s say you’re looking to apply for a mortgage and you found a cosigner who’s willing to give you a little extra boost to help you qualify. While it’s definitely doable to apply for a mortgage with a cosigner who’s not occupying the property, there are some restrictions.

Whether or not you can apply with a cosigner will depend on the type of loan you’re trying to get. Non-occupant co-borrowers are most commonly seen on conventional loans and certain types of FHA loans.

Conventional Loan Requirements

In order to apply with a non-occupant co-borrower for a conventional loan, the cosigner has to sign the loan, but they don’t need to be on the title of the property. The co-borrower’s credit will be pulled, and the score will be used along with the occupying client to determine loan qualification.

With conventional loans, things start to diverge based on who owns the loan when looking at debt-to-income (DTI) ratios.

At Quicken Loans, the occupying client DTI ratio can only go up to 70% if a client has a down payment of 20% or less. If the down payment is greater than 20%, there’s no cap to the ratio. Different lenders may have different policies.

The non-occupying co-borrower’s income and debts are added to the housing expense- to-income ratio (HTI). A client’s HTI is the percentage of their monthly income that goes toward housing expenses including principal, interest, taxes and insurance. This also sometimes includes homeowners’ association dues. Taken together, these five elements of a mortgage payment make up the acronym PITIA.

FHA Loans

If you’re looking to get an FHA loan with a non-occupant co-borrower, there are a few other special restrictions.

First, you can have a maximum of two non-occupying co-clients. Their primary residence needs to be in the U.S. If you’re occupying the property, you can have a maximum DTI of 70% with a down payment or equity of less than 20%. If you have a higher down payment or equity stake, your DTI is unlimited. Finally, non-occupant co-borrowers are required to be on both the title and the mortgage.

In order to take full advantage of the FHA program and only bring a 3.5% down payment to the close, there are a couple of additional guidelines.

The property you’re buying must be a single-family residence. The non-occupant co-borrower must be a relative or a close friend as well. For the purpose of your mortgage, the following are considered relatives:

  • parent or grandparent (step, foster and adoptive)
  • child (step, foster and adopted)
  • sibling (step, foster and adopted)
  • aunts or uncles
  • spouse or domestic partner
  • in-laws

If the non-occupying co-client is a close friend, you’ll have to provide some extra documentation describing the length of your relationship and their interest in helping you.

There are a few instances in which you must have a down payment or an equity stake of at least 25%:

  • The non-occupying co-client is not family or a close friend
  • It’s a non-arm’s length transaction (the co-client is also the seller)
  • A two-unit property is being purchased

Before cosigning on a property with anyone, be sure you both understand what you’re getting into.

Do you still have questions about applying for a mortgage with a cosigner? Leave them in the comments below.

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This Post Has 198 Comments

  1. My husband was pre-approved for a $360,000 FHA loan. The mortgage broker said we were golden, we only needed the 3.5% down payment. We found a house, put a offer in and was accepted . Now the broker is saying oops his DTI ratio was 1% off and we have already paid for inspection, put out good faith money down. The lender said well let’s put you on there because your income is great, I told him my credit scores are horrible , he said oh don’t worry I will fix it. Found out Friday he gave it to another broker. Bc he can’t make it happen, even told my hubby to pay off a $5,000 credit card bill, we did. Now told us tonight he can’t do it???!!! Ugghhhh I am soooo depressed and feel like we have been lied too after $9,000 out of pocket . I have a cousin with a 760 credit score, she’s not sure of her DTI ratio, will underwriters look at that? She makes great money as well. If she’s a consigner will she have to remain on the fha loan the entire life of the mortgage ? We are so confused , frustrated and feel like we have been taken advantage of. Any suggestions?

    Thank you,
    JGWRNCHPN

    1. Hi Jani:

      I can definitely answer the first question. If your cousin were to cosign with you, lenders take into account all the borrowers on a loan including cosigners. Also, she doesn’t have to be on the loan forever. You can always refinance when you get your credit in order and take her off. For the rest of this, it’s really best that you talk to a licensed mortgage banker. I have a couple of options for you. If you send us an email at Michelle@quickenloans.com with your full names, any preferred contact information and the state in which you’re looking to buy, we can put you in touch with someone who can dig in your situation and look for options. If you prefer to get started over the phone, please call 800-251-9080. Either way, we can certainly have someone take a close look at this and see if we can help you accomplish that big house purchase.

      Thanks,
      Kevin Graham

  2. I am wondering what, if any, options for a mortgage are available to me.

    I have been a stay at home mom for 10 years.
    I am going through a divorce.
    I currently own a home and have never missed or been lat with a payment in 14 years (both my husband and I on mortgage and deed) but I will be removed from both as soon as the divorce is final.
    I will be a full time student beginning 9/2016
    I have about 5k in the bank.
    I have a 730 credit score.
    I will likely have a 10% down payment.
    I will be receiving child/spousal support and that will be my primary source of income until my degree is completed in 10/2018.
    I have a family member willing to co-sign if they are eligible to do so.

    1. Hi Michelle:

      I have a couple of options for you. You can get started looking at your options online by going through Rocket Mortgage. If you have any issues or questions, you always have the option of chatting or calling one of our Home Loan Experts. If you prefer to get started over the phone, give us a call at 866-344-6606. We can definitely look into your options.

      Thanks,
      Kevin Graham

  3. Could you have someone contact me? I’m interested in a FHA loan, my credit is sub par due to never having credit and credit inquiries. My grandfather has agreed to co sign on a loan with my fiance and I.

    1. I can absolutely have someone contact you. However, you may need to build that credit score up first. Here’s a blog post with more information. Someone will be reaching out to go deeper into your personal situation.

      Thanks,
      Kevin Graham

      1. Hi Kevin – I’m finding conflicting information about non-occupant co-signers for conventional loans. I was told that the rules for conventional non-occupant co-signers are the same as those for FHA loans. Is that true?

        Also, for Multi-family properties (purchased with conventional loans), would the downpayment still have to be 25%, even though the main loan applicant (me) would be occupying one of the units?

        Thank you for any help!

        1. Hi Katie:

          The rules for non-occupant cosigners are different for FHA and conventional loans. I’m going to have a Home Loan Expert reach out to go over any specific questions you may have on this front.

          In terms of down payments on multiunit properties, you can get a loan from us for as little as 3.5% down on a two-unit FHA loan. More units require a down payment of at least 20%.

          Hope this helps!

          Thanks,
          Kevin

  4. My husband and I spoke with a lender who said we were pre approved for a mortgage of 65,000. Once we brought his income documents he said we were no longer eligible. He said his credit score is good and his income was good but they said his taxes showed he wrote off 12,000 in expenses. We brought the last 3 yrs taxes to prove that 2015 expense of 12,000 was a one time thing but the lender said they are asking for proof. We don’t have proof. They stated his 2015 taxes show he made 23,000 on his 1099 form and if he had 12,000 in expenses so in their eyes We make enough. My husband drives a taxi and the 1099 form only shows the credit card income not his cash. I’m just really upset with everything because we’ve tried 3x to get a mortgage over a course of 6yrs and it’s always something negative that eventually comes up. I’m not eligible to be on the loan even though I work and hv a steady job with a billing company and its because of my bad credit. I hv defaulted student loans and old medical bills my current score is 540. I did rehabilitate my 07 loans and a new lender took over my loans in June I made my first payment June 25 2016. My credit doesn’t reflect it yet and the department of education said it could take 30 to 60 days to show good with the credit bureaus.My 2008 student loans I just started the rehabilitation program and I hv 8 months before those are out of default and made my first payment with this June 28, 2016. The lender said I need to pay old medical bills and try to settle to see if my score will jump up to 620 by July. That seems impossible and I don’t hv extra money to pay those it’s about 3,000 medical debt and a credit card he said I should pay 2,000 and by July 2016 it should put me at a 620 score. If I pay that money I will be tapping into some of my down payment money. I seriously doubt my score will bump to 620 in 30 days that’s unrealistic to me. To top things off the lender gv our realtor the pre approval letter before seeing our taxes and our realtor already submitted our 1,000 earnest money and signed contracts to the bank. Luckily it’s a foreclosed home which means it could take months before we hear if they accept our offer of 65,000. I just need some really good advice and want to know if there is help we can get before the forclosed home bank responds. Sorry this was lengthy I really just want to know if we can get my husband approves at this point. By the way his score is 620 ,633 and 650 with the 3 credit bureaus and the loan is a fha loan. Thank you in advance for any help you provide and my monthly income before taxes is about 2,300

    1. Hi Jaime:

      That is a difficult situation, but I’m going to have one of our Home Loan Experts reach out and offer any possible advice on any options you may have. Thanks for reaching out!

      Kevin Graham

      1. I was wondering how i can get some advise on some ideas on some mortgage options. I bought my last house about 13 years ago when i was single, i know that times are very different now-never paid late and made every payment. We sold it about 2 weeks ago so that we could feel secure it would sell and i really thought it would have taken longer-that being said…we are now in a rental that i can’t stand because i was just in my owned home and now i am paying someone else’s mortgage. I have also acquired some debt in the meantime that i have gotten personal loans for that i am now paying off consistently and moving those numbers downward but I know my DTI ratio will probably be to high. Unfortunately, i will have to probably get the next mortgage on my own again because my husband is self-employed. I make decent money on paper and have the 20-30% down payment we need but am nervous i will have to jump through hoops to get new mortgage for the size house i would like. My husband of course makes great money but does not reflect on our taxes so i don’t think i can use him on the loan…would it be better to get a co-signer and then ultimately one day buy the house from the other person? Looking for advise that is realistic and something i can have a timeline for so i can stop stressing and see some kind of light at the end of the tunnel…thanks so much.

        1. Hi Gab:

          We can look into whether it makes sense to include your husband on the loan. There’s definitely some different documentation required for the self-employed, but we can help you look into all your options. I think it’s best I put you in touch with a Home Loan Expert to go over your personal situation. They’ll be reaching out. No need to stress. This is what we do.

          Thanks,
          Kevin Graham

  5. I am self employed as many on this thread are and have the same problem of my AGI being lower than what my actually income is. I spoke with a local mortgage representative and they told me only family members are allowed to co-sign is this true? I can come up with a DP of 20-25%. Any help would be appreciated.

    1. We’re going to have one of our home loan experts reach out to you, Tony. They’ll help you look at your options. Thanks, and best of luck to you!

  6. I am moving to another state and my aunt is going to co-sign a home loan for me. I do own a house and have never been late on payments but because of a bankruptcy 4.5 years ago my credit is still not where it used to be and I also will not have a job as soon as I get there. What do I need to do to get started to be pre-qualified for a home loan so when I get there I can start the process of looking for a house. She lives in another state so everything will have to be handled by mail and may take longer, so I would like to get started sooner rather than later. How can I search for a lender before I move. Thanks.

    1. Hello, Janeen. I’m going to have someone reach out to you about your mortgage options. Thanks for your comment!

  7. My husband and I are in the middle of a chapter 7 Bankruptcy. Our home was foreclosed 2 years ago. My brother-in-law was very gracious and got a mortgage for our current home. The mortgage is in his name, but we make the payments. We have not missed or been late on the mortgage for 2 years. However, our payment has increased $300 per month due to property taxes. The taxes are for investment property as oppose to residential. My brother-in-law is willing to “cosign” a mortgage for us, or put us on the current mortgage to change the tax rate. Is this possible?

    1. Hi Kelly:

      Unfortunately, you really don’t have an option until the bankruptcy is discharged. After that, there’s a waiting period that depends on the type of loan you’re looking at. I can have someone reach out to you with a timeline of how this works.

      Thanks,
      Kevin Graham

  8. My wife and I are looking to purchase a home. We are working with a lender currently and already have a home selected. Our credit is 620, but due to my student loans we required a cosigner.
    My mother is willing to cosign for us on an FHA mortgage, but she has not filed her 2015 taxes. She will be filing them tomorrow, but the mortgage broker is looking for the tax documents from hwr. If she files tomorrow and we provide pdf documents, will this be an issue?

    1. Hi Carl:

      We can’t comment on the specific policies of another lender, but maybe we can talk to you about the type of documentation that’s usually necessary in these situations and what forms of it are suitable. I’m going to have someone reach out.

      Thanks,
      Kevin Graham

  9. My husband is going through a short sale on a house we moved out of a year ago. My name was not on that mortgage. Now we have been paying rent $2500 monthly for the past year. It’s killing me to pay all this rent money when it would be so much cheaper to buy and pay a mortgage. My credit score is 642 but I don’t qualify for enough money to buy the house size we need. Looking at a $320k house and putting $35k down. Is there anything I can do to get a higher loan by myself since I can’t use my husband’s income due to the short sale.

    1. Good morning, Sherri. I’m going to have someone reach out to you about your options. They’ll send you an email and walk you through your options. Thanks for commenting and have a nice day!

  10. I am trying to purchase my current home. My grandmother reversed and the bank is willing to sell the home to me for 95% of the appraised value. I was in touch with one lender that would not allow my brother to so-sign with me. My credit is 643 and I have a decent income, but I have a bit of student loans.

    Can you help?? I have 3-4 months since the bank is also in proceedings to be granted a public sale date and I would need to close before that day.

    Thank you!

    1. Hi Michelle:

      Every situation is different, but we would be happy to look into your options with you. Someone will be reaching out.

      Thanks,
      Kevin Graham

    1. Hi Drew:

      We have some loan options for people that are applying with a cosigner. I’m going to have someone reach out. Have a great day!

      Thanks,
      Kevin Graham

  11. I am trying to purchase my home (currently on land contract), but my credit is not good enough. My in laws are willing to cosign,but I can’t find a company that wants to help. Any info is greatly appreciated. Thanks in advancd.

    1. Hi Laura:

      I’m going to have someone reach out and help you look into your options. At the very least, we may be able to give you some advice.

      Thanks,
      Kevin Graham

  12. I want to purchase a mobile home/stationary RV with a small lot of land. My credit is poor because of student loan issues. I only need $30,000 and my Mother, who lives with me is willing to cosign with me. What kind of loan would I need – mortgage, RV or miscellaneous and would I have any trouble financing for at least 15 years?

    1. Hi Kimberly:

      Unfortunately, we don’t do loans for mobile homes. Your loan amount is also small enough that you may have a hard time finding a lender that will give you a mortgage. Your best bet may be to go with a personal loan. One thing I will say is that not every personal loan company offers the ability to apply with a cosigner. You may have to do a bit of shopping around. I hope this helps!

      Thanks,
      Kevin Graham

  13. I was told if my dad cosigns for me an fha loan wouldnt be approved because they use the lower credit score. Why then even offer to use a co-signer if the lower credit score would be used?

    1. Hi Tracie,

      Having a cosigner can help because you can use their income to qualify. I’m going to have someone reach out to you to offer any advice we can give and go over any options that may be available to you.

      Thanks,
      Kevin Graham

  14. I would like to know if it’s possible for my mother to qualify for a FHA loan using her credit, but using me and my husbands income.

    1. Hi Belinda:

      Every situation is different, but I’m going to have someone reach out to you to go over any options you may have.

      Thanks,
      Kevin Graham

  15. I would like to purchase a house for 77.500
    My mother would like to cosign, and my credit is not good. Is there any way for only her to be on the loan without me?

    1. Hi April:

      I’m going to have someone reach out to you about this. My concern is that if you’re not on the loan, it will probably be considered an investment property for your mother. Those come with higher rates of interest. Someone will be in touch to go over your options.

      Thanks,
      Kevin Graham

  16. After reading the questions/comments on this blog, I would like someone to contact me regarding an FHA mortgage.
    Thank you.

  17. I want to purchase our family home. My parents have died and we are waiting to get through probate. My brothers support this decision. I’m order to live there I have to change jobs which I have one that will start in two weeks and I have given notice at my current job. I have a credit score of 695 and I can put 10% down when we purchase the home. If I can’t because of a new job I have a brother with excellent credit and cash flow that will cosines for me. Is this possible or am I unrealistic.

    1. Hi Brent:

      We can definitely help you look at all your options. You have multiple factors at play so I’m going to have someone reach out and look into your situation.

      Thanks,
      Kevin Graham

  18. I would like to know if it’s possible for my fiance to buy a home using her credit, but use my income without me being on loan?

    1. Hi Manuel:

      Every situation is different, and we would be happy to have someone look into your loan options with you.

      Thanks,
      Kevin Graham

  19. Hello Kevin,

    I understand what a non occupying co borrower is but I have a few questions.

    1. If you have 20% down and need a non occupying co borrower to help with the DTI what percentage will the mi be?

    2. What is the amount of time that the non occupying co borrower is required to stay on the loan? Can they get released from the loan after a certain period of time?

    Thank you and I will look forward to your answer. Monica

    1. Hi Monica:

      In terms of the first question, mortgage insurance rates typically are dependent on the size of the down payment and your loan-to-value ratio. As for the second question, the co-borrower can come off the loan at some point, but I’m going to have someone reach out to you regarding how your loan qualification is reevaluated at that point. They’ll be in contact.

      Thanks,
      Kevin Graham

  20. Kevin,

    I want a loan co-signed with my dad.

    My Credit Score is 811, my Dad’s is 850.

    I own investment vehicles so my taxes show little income which is is is why I want my dad on the Loan.

    We’re looking at buying a $500K house. I can put any down payment amount down – as needed.

    If my dad co-signs, I can live in the house, pay the mortgage, and write-off the interest – Just as if took out the loan myself?

    Or does the loan have to be treated as an “investment property” loan and my dad would have to “rent” the property to me?

    Thanks.

    Eric

    1. Hi Eric:

      If your dad cosigns with you, you can live in the house and paid taxes on it as a primary residence. It’s not an investment property if you’re also on the loan. Hope this helps!

      Thanks,
      Kevin Graham

  21. I am seeking a $40,000 mortgage on an $80,000 single family home. (50% down payment) I will occupy. I am credit challenged (600 ish) due to chapter 7, 18 months ago. My Brother is co-buying with me, or co-signing for me, whatever is required or most advantageous. He has top tier credit. How should we proceed in order to receive the best interest rate and fastest approval? Should I start an application myself? Does it matter who is “first” on the mortgage? (Is that a thing?) Thanks.

    1. Hi Garett:

      I’m going to have someone reach out to you about this, but ordinarily with a chapter 7 bankruptcy, you have to wait at least two years before applying for an FHA loan. I’m going to have someone reach out to you because you mentioned cosigning with your brother. There may be an option if he applies on his own, but they can go over this with you.

      Thanks,
      Kevin Graham

  22. HI,
    My wife and I want a house and my father in law wants to help but obviously not have the loan count as an investment loan that requires a 20%-25% down payment. Is this the best option to have little to no down payment? He was hoping to buy the house and we make the payments but we’ve been told it would count as an investment loan. how can we make it more manageable with a lower down payment to no down payment if required

    1. Hi Fernando:

      You may be able to accomplish your goals by having your father-in-law cosign with you and you would actually be the ones to own the house, but I’m going to have someone reach out and go over your options.

      Thanks,
      Kevin Graham

  23. I am looking into having my father co-sign a mortgage but someone said that if he signed, his wife (My step-mother) would also have to cosign because they are married. Is this true? He has co-signed for me for multiple apartments before and she never had to sign too. Something about it seems weird to me.

    Thank you.

    1. Hi Shyane:

      The only way I can see that coming into play is if you live in a community property state, but I’m going to have someone reach out and help you look into this. They’ll be in contact.

      Thanks,
      Kevin Graham

  24. I would like to do the opposite. Are there any other hoops to jump through to take someone off of a loan due to a divorce and refinance longer terms.

    Are there special requirements for jumbo loans?

    Thanks!

    1. Hi Charles:

      You’ll need to provide divorce documentation, but you should be able to refinance the loan. As far as jumbo loans, I don’t know about any special requirements, but I’m going to get your inquiry to a Home Loan Expert who will.

      Thanks,
      Kevin Graham

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