A father and daughter making cookies

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. I have a credit score of at least 590, however my debt to income ratio was to high and I’ve only been at my job for a year due to moving back to the state. I was looking to buy a foreclosure property for $85K and fix it up. I do have a 10% down payment. My uncle is willing to co-sign for me who has great credit and owns a home. Will my uncle have to be on the loan/deed?

    1. Hi Brian:

      If he is cosigning, he will be on the loan, but he doesn’t have to be on the title. I would recommend talking to one of our Home Loan Experts by calling (888) 980-6716 and we can look into your options.

      Thanks,
      Kevin Graham

  2. I am currently seeking to get pre-qualified for a FHA mortgage and my father has agreed to be a co-signer but not a co-borrower. The distinction he makes is that he is looking to refinance his own home shortly and does not want his support for me to interfere with that effort. What is the difference between a co-signer and co-borrower and is that a legitimate concern? How can we get around it?

    1. Hi Tony:

      Unfortunately, for the purposes of a mortgage process, a cosigner and co-borrower are the same thing. By cosigning, your father is saying he will make the payments if you can’t make them. Because of this, it’s going to be taken into his debt-to-income ratio when he goes to refinance as if he was making that payment every month. It’s a legitimate concern for sure. However, there is no way around it. If he cosigns, they’ll have to take that payment into account when he goes to refinance. I hope this at least helps you to know where you stand.

      Thanks,
      Kevin Graham

  3. I am trying to buy a townhouse and I will have a roommate. My roommate does not want to be on the loan, she just wants to pay rent. Given this, we can afford a lot more than the bank is willing to approve me for. My mother is willing to cosign the loan because she knows we will have no trouble making the payments together. However, the bank is telling me the only way she can cosign is if it is considered an investment property and we have at least a 25% down payment (which I don’t). How can I get a loan that allows my mom to cosign while still owning her own home?

    1. Hi Karissa:

      There may be restrictions specifically because it’s a townhome, but that also depends on the type of loan you’re getting potentially. I’m going to recommend you speak with one of our Home Loan Experts because they’ll be able to go over your situation and give you more definitive information. You can get in touch with them by filling out this form or calling (888) 980-6716. Good luck!

      Thanks,
      Kevin Graham

  4. My brother is a 1st time homebuyer and is looking into purchasing his 1st home. my dad is willing to co sign with him to get approved for a litter higher amount. my dad currently has a home with a conventional loan, even though my brother qualifies for FHA they told us if my dad is added as a co signer it would have to be a conventional loan and he would have to put his house out for rent? and the new house would have to be a certain distance from my dads? pls help.

    1. Hi Jackie:

      It sounds like the lender might be misunderstanding what your dad and brother want. That sounds like they expect your dad to be buying an investment property which will then be rented to your brother. There’s some definite miscommunication going on here.

      Non-occupant co-clients are allowed on FHA loans assuming your brother meets certain qualifications. I’m going to recommend they reach out to one of our Home Loan Experts. We’d be happy to go over the options if they fill out this form or call (888) 980-6716. Have a great night!

      Thanks,
      Kevin Graham

  5. Hello,
    My husband’s mom asked him to be a non occupant cosigner, will this affect him when he wants to look for his own home ? Will he qualify the same or will that affect him since he helped her . She plans to take him off the lease in a year but several real estate agents have advised us that it will affect him and two told us it will not affect at all . Please help

    1. Hi Diana:

      If he becomes a non-occupant cosigner, it would be factored into his debt-to-income (DTI) ratio as if he were making the payment every month. Therefore, it would lower the amount you could be preapproved for because you would be qualifying with that payment as well. Depending on the house you’re looking at, that may or may not be a problem, but at least you know where you stand.

      Thanks,
      Kevin Graham

  6. My x husband and I are good friends. I want to buy a home. Everything is good but one small complication, my x was willing to gift me the down payment and sign all papers explaining the “gift”.
    I learned the the gift has to come from a blood relative only. So now he will just cosign. All the docs are good for this small loan, will he be able to cosign due to the nature of our friendship? Or will we be told no because we are Divorced? We have all of out transactions documented showing how well he pays my alimony each month. However, we are still very good friends. Will this happen?

    1. Hi TW:

      There should be nothing that prevents him from cosigning. There’s no requirement that it be a relative. Hope this helps!

      Thanks,
      Kevin Graham

  7. Hello!

    I recently moved in with my aunt in California because her husband passed away and she was all by herself, and I left my mom and siblings back in Texas. My mom wants to buy a house in Texas, but makes a little under $20K a year with a 700 credit score. I make $50k with a 650 credit score and would like to know if our situation could qualify for the “non-occupant co-borrower” FHA loan listed above (with me being the co-borrower) even though I live in California.
    What would be best for our current situation?

    Thank you!

    1. Hi Diana:

      As far as I’m aware, there’s no requirement that the two of you be in the same state. Our Home Loan Experts know more and could confirm this for you. You can reach them by filling out this form or calling (888) 980-6716.

      Thanks,
      Kevin Graham

  8. My credit score is only about 570. My uncle has a score of about 700 and is wiling to co-sign for me. How would I even go about finding someone to work with me and find a home loan?

    1. Hi Josh:

      Having your uncle cosigning with you will help with your debt-to-income (DTI) ratio. However, for an FHA loan, you need a minimum credit score of 580. It goes by the lowest score of any borrower on the loan. The good news is you’re close enough that I think we can offer some tangible advice to help you get to where you need to be. I’m going to recommend you get one of our home loan experts a call at (888) 980-6716. They’ll be able to go deep on your situation and offer advice.

      Thanks,
      Kevin Graham

  9. Hello!

    My husband just got out of the military and started his own bodywork business that is going very well. We pay a lot in rent for our townhouse and I’d like to own a home. We were told that he needs to be in business for himself 2 years before we can even be considered for a loan. If his dad consigns a loan with us, would that remove the requirement? We have other sources of income as well such as disability and odd jobs so we would have no problem paying it. We live in Nebraska (if that matters 🙂 ).

    1. Hi Hannah:

      It’s not necessarily true that he has to be self-employed for two years. Having your father-in-law sign with you may help in terms of having more qualifying income, but every situation is different. I’m going to recommend you talk to one of our Home Loan Experts by filling out this form or calling (888) 980-6716. They can really go over your situation in detail and come up with the best options.

      Thanks,
      Kevin Graham

  10. My Dad is willing to co-sign as a non-occupant for a FHA loan for me. However, he doesn’t want his wife to know. Will her signature be needed at anytime? They live in Florida, I will be purchasing in NJ. They file jointly and they are married, and own their home in Florida. PLease advise.

    1. Hi Marie:

      That’s a good question. One of our Home Loan Experts would be able to help give you some guidance there. You can reach them by calling (888) 980-6716. I do know neither of those are community property states, so there’s no need for her to be associated with the loan, but I’m not sure about signatures.

      Thanks,
      Kevin Graham

  11. Kevin:
    I recently did some major (much needed) renovations to my mom’s house (as a surprise to her) figuring I would just consolidate my expenses into a home mortgage loan where I would make the payments on her behalf. Renovations are done (new roof, siding, gutters, windows, paved driveway, carpet, etc.) and now I am having a hard time getting anyone to consolidate the expenditures into a home loan for us. And, to be clear, we are not talking about a lot of money – $25,000. My mother is 80 years old and has no credit score — she owns her home outright and has never paid a bill late in her life, she just doesn’t use credit. Her home has been paid off since 1979. Her only source of income is her social security, which is more than adequate to cover her expenses and then some. Knowing it would be hard for her to quality on her own, I intended to be a non-occupant co-signor. I have an excellent credit rating (as does my husband). I’ve been told over and over that you cannot co-sign on a home loan – yet all the research I do on line tells me different (including this article). Is it possible they are discriminating because of her age? Your thoughts/recommendations are greatly appreciated. –Kathy

    1. Hi Kathy:

      Without knowing the content of your conversations, I can say based on what you’re telling me that I don’t think this is a case of age discrimination. If they’re telling you that you can’t cosign a mortgage loan – whether you occupy the home or not – they’re giving you the wrong explanation. I think there’s something else going on here.

      You can cosign a mortgage loan and you can do so as a non-occupant. The issue you’re going to run into with any lender is the fact that she has no credit. The vast majority of mortgages these days are backed by Fannie Mae, Freddie Mac or the FHA. They each have minimum credit score requirements that apply to all borrowers on the loan. The purpose of having a cosigner is to help lower the debt-to-income ratio of the clients because you can use the combined incomes in order to qualify. That won’t help you here with her not having a credit score at all. That said, I can understand not wanting to put a ton of effort into building credit when she’s 80.

      You do have a couple of options you could take a look at. You (and your husband if you wanted) could try to get a mortgage on the property. It would be treated as an investment property loan because you don’t live there. If you want to look into that option you can talk to one of our Home Loan Experts by filling out this form or calling (888) 980-6716.

      Because the size of the loan is so small, another option you might take a look at depending on which loan makes the most sense cost-wise is a personal loan. Our friends over at Rocket Loans handle those if you want to take a look at that.

      I really hope this helps!

      Thanks,
      Kevin Graham

  12. I’m a first time home buyer with credit of 740 with 3 credit cards but my longest credit card is almost 2 years. My brother will be consigning for a loan with me with credit score of 760. Will I still be able to qualify for a loan with just credit card credit or do I need an installment loan in order to qualify?

    1. Hi Emily:

      The requirements for the accounts and their types depend on the type of loan you’re trying to get. I’m going to recommend talking to one of our Home Loan Experts and they can more thoroughly go over your situation and all of your options. You can get into it with them by filling out this form or calling (888) 980-6716.

      Thanks,
      Kevin Graham

    1. Hi Janet:

      If you’re worried about them not making the payments, the only real advice I can give you is to really be able to vet the person you’re cosigning for and make sure you know how responsible they are financially.

      Thanks,
      Kevin Graham

  13. My husband and I are looking to buy a house and his mom is willing to cosign, but she lost her job in 2015 so she has a 1099 as of 2016. She makes quite a bit on rental property’s each month, but I know we are supposed to provide 2 years tax returns and w2s. Is there away around this with a 1099? Like wold we be able to do 1 year of a 1099 and 1 year a w2? Pr even just 24 months of her bank statements? Thank you so much in advance for your help.

    1. Hi Stephanie:

      We can look into your options. Every situation is different. I’m going to recommend you talk to one of our Home Loan Experts. You can do so by filling out this form or calling 888-728-4702.

      Thanks,
      Kevin Graham

  14. My sister and I would like to buy my mom’s house and rent it back to my mom. Should my sister and I cosign? Could all three of us cosign? Only my mother would be living there. She would like to access the equity to pay off medical debt. My sister and I have excellent credit, but my mom does not.
    Thanks
    Nathan

  15. I would like to co-sign a mortgage for my sister, would I receive copies of the Loan Estimate and other disclosures issued during the processing of the loan?

    Thanks

  16. I will be a 1st time home buyer and I have a FICO credit score of about 640. I just recently started my job due to a layoff. If my mom who had a credit score of about 740 and makes about $90,000 a year cosigns for me, will I be able to get a home loan? I found a fixer upper for about $35,000 and I am very interested in it.

    1. Hi Yazman:

      Every situation is different so I can’t give you specific approval advice on the blog. In order to get the best possible information, you should connect with one of our Home Loan Experts by filling out this form or calling (888) 728-4702.

      Thanks,
      Kevin Graham

  17. I am a first time home buyer and because of law school debt my current income is a third of my debt. I have a 740 credit score and my parents are co signing for the loan. They make collectively 50% more than the home I’m getting and have a paid off home three times the cost of mine. Even with my debt will I likely be approved?

    1. Hi Josh:

      Having your parents cosign will definitely help with your debt-to-income ratio. However, I can’t realistically answer your chances of approval in the comments section. For that, you would have to talk to one of our licensed Home Loan Experts. If you fill out this form or call (888) 728-4702, we can give your situation a more thorough look.

      Thanks,
      Kevin Graham

  18. I currently rent a home to a long time employee and his family. They would love to own the home and should be able to reduce their costs if I cosign. The home is valued at 170,000 I’d sell to them for 150,000 I owe 85,000 on the current mortgage. I’ve had it for 7 years or so. Can I consign under these conditions their credit is bad but their income should easily support the mortgage. I’d want the option to take over the mortgage should they default. They currently pay me 1000/month and have for 6 years.
    Thanks
    Ricky

    1. Hey Ricky:

      You should probably talk to one of our Home Loan Experts. There are multiple things you need to go over. Please have your employee fill out this form or call (888) 728-4702 and we’ll be happy to go over your options.

      Thanks,
      Kevin Graham

  19. I am a student looking to purchase a home this summer. I am willing to put down 25%-30% for a down payment. My problem is that I have no credit history due to the fact that I have only been on my own for the past 6 months. I currently rent an apartment, but I paid upfront cash for the entire year at the beginning of my lease. I’m not sure if this will help build my credit at all since I did not pay month to month. So now I am looking to see if my mother would coborrow for me. Will my down payment help heighten my chances of getting a loan? Or is my best bet to have a coborrower with established credit?

    1. Hi Mekayla:

      Even with a co-borrower, you’re going to have to have some kind of credit history before applying for a mortgage. If you paid up front, you don’t have a rent history, and it’s not helping. You should probably get a credit card or two. Since you have no credit history at all, it’ll probably be easiest to get a card that’s secured by your own funds to start. After you’ve had that for a few months, you can look at getting a more traditional credit card. Keep the accounts open and use both and just keep paying the bill. It also usually helps to go for something like a car loan before trying to get a mortgage because it’s a lot smaller amount and the mortgage lender will see how you handle paying off debt. I realize that what I’m telling you probably won’t help you get a house in the next six months, but it takes time to build up a credit history. Here’s a blog post on getting started with credit. Hopefully, this helps you get started on the right path.

      Thanks,
      Kevin Graham

  20. I will co-sign a mortgage & be on the deed for my son to purchase a home priced $576,000, $422,000, loan amt $144,000. My income is great, my son’s debt ratio is 43%. All else is fine. The lender indicates because I will not be occupying the home they cannot count my income. does this make sense.

    1. Hi M:

      There could be something else I’m missing here, but we don’t have those restrictions. You should be able to contribute income as a non-occupying co-client. I’m going to recommend you and your son talk to one of our Home Loan Experts by filling out this form or calling (888) 728-4702.

      Thanks,
      Kevin Graham

  21. My closest friend (she’s like my sister) asked me to cosign her for buying a house. ‘m wondering if it is possible only myself (my income) to cosign for the loan, without including my husband’s income & credit. We just bought our house, and the loan it’s only under his name. But during the process, the bank asked for my income, some kind of permission, signature, etc. FYI, my husband and I have shared bank accounts and we file our tax as married filing jointly. This is why I’m wondering if it’s possible only me to cosign.

    1. Hi Riris:

      It’s always possible for you to be the only one to cosign. What really matters is whether you’re in a community property state and the type of loan they are getting. If they get an FHA or VA loan in a community property state and you cosign, they have to take a look at your husband’s income and debts and include that in the calculations. In a community property state, if you have obligations that you cannot meet, in many cases the spouse is responsible. That’s why they ask for all that information. It’s worth noting that this doesn’t necessarily apply if they’re getting a conventional loan.

      Thanks,
      Kevin Graham

  22. My husband and I had one late mortgage payment due to a total mistake in our bank account. We fixed the problem ASAP, are current on our mortgage, and have never had a late payment in 12 years until now. We are not able to get a loan for another year because of it. We gross $160,000 a year! It made our credit score plunge and there’s nothing we can do about it. We’re trying to get a new home loan. Can we do it with our parents as a co signer?

    1. Hi Kathleen:

      We can certainly look into your options. You can get in contact with us by filling out this form or calling (888) 728-4702. One of our Home Loan Experts will be happy to go over your situation.

      Thanks,
      Kevin Graham

  23. My question is, I am a first time home buyer with awful credit. My dad has offered to cosign for me on buying a home. However he plans to start buying a home for himself within the next 3-5 years. If he is a non occupying cosigner on my loan, will this effect him getting into his own home later on if my loan is still open?

    1. If your father cosigns with you, it would affect his debt to income ratio which has an effect on how much he qualifies for if he buys a house in the future. However, you can agree to refinance him off when you’re in a better position to qualify. The bigger problem you’re going to have is that lenders require a 580 credit score from the lowest credit score borrower on the loan. I’m going to recommend you check out QLCredit to get a look at your credit report without having it affect your score. The site will give you personalized tips. Hope this helps!

  24. My parents want to purchase a house with 50% down payment and have credit scores above 700. The problem is they have no income and plan to get jobs after they purchase the house. They are relocating from another state. Can they get a loan?

    1. Good evening, Sheila!

      As you know, there are many factors in getting a mortgage. Your parents are going to need to speak with one of our home loan experts to see what they are approved for. Give us a call at (888) 635-1576 and we can see what we can do to help.

      Have a great night!

      Kollin Currie

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