Sometimes, you may just need an added boost to qualify for the loan amount required to get you into your new home, particularly following the introduction of tighter mortgage qualification rules.


If you’re experiencing difficulty meeting traditional lender mortgage guidelines thanks to such factors as a credit blemish or simply because ‘life happened’ (divorce, illness, job loss, etc), you may benefit from having someone co-sign to help you qualify for a mortgage.


If you don’t qualify because it’s clear you can’t afford to carry the costs associated with the home you’d like to purchase, it’s in your best interest to take another look at your financial situation and consider buying a more affordable property.


But if having a co-signer is the help you need to qualify for a mortgage on a home that’s within your means, it can be a great solution.


Who makes a good co-signer?

When looking for a suitable co-signer, it’s important to consider someone who compliments what you’re currently lacking from your lender’s perspective. If you have poor credit, for example, you want to bring a co-signer on board who has healthy credit. Or, if your income is preventing you from qualifying on your own, you’ll want to find a co-signer with strong income. 


The most commonly used co-signors are parents or other close relatives. It’s also possible to have more than one person co-sign a mortgage. In any case, the lender must feel comfortable that the co-signer(s) will help lessen the risk associated with repaying the loan.

Co-signing can work in a couple of different ways. In one scenario, the co-signer can become a co-borrower. The co-borrower fills a similar role to that of a partner or spouse who’s buying the home with the primary applicant. Basically, this involves adding the support of another person’s credit history and/or income to the application. He/she is placed on the title for the home and the lender considers this person equally responsible for the debt should the mortgage go into default.


Another option is when the co-signer becomes a guarantor. The guarantor is backing the loan and vouching that you’ll pay it back on time. As a result, the guarantor is actually responsible for the loan if it goes into default.


Have questions about mortgage qualification, co-signing options, or your mortgage in general? Answers are just a call or email away!