Co-signing a mortgage loan: instructions and useful tips
Buying a house with a co-signer? To try with a co-signer already on it? You’ll want to watch this video first.
Co-signing can help someone get approved for a mortgage to buy a home, but it’s not without its dangers.
Learn more about co-signing and access current mortgage rates.
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Co-signing a mortgage: transcription
Today we are going to talk about co-signing. It’s really not that bad, but like everything, there are ups and downs.
First, a co-signer with good credit does not negate a borrower’s bad credit. Lenders use the primary borrower’s credit to qualify. They will not go with the cosigner’s credit. Bad credit and good credit are not equal to average credit.
Although the co-signer cannot improve the credit score taken into account to assess or qualify for the loan, the co-signer’s income will be added to the borrower’s income to decide the amount of the loan they will actually qualify for.
Some co-signers, they are left behind when the borrower stops paying. The big mistake is when you sign for someone who is not responsible. This is where you must learn to say the word “No”.
It’s as simple as that, look no!
Your financial security is at stake here, so make sure the person is reliable enough to take on this responsibility. If not, you know what to do. Ready-no!
The lender won’t care that your deadbeat brother has stopped paying, he wants his money to come from somewhere and that’s all you at the time.
My advice before co-signing for someone is to make sure you can really trust that person. Don’t let the guilt of refusing to co-sign eat away at you, you’ll be much more upset if you co-sign for someone and they destroy your credit. If you really, really need to co-sign, I suggest you ask the borrower to pay you and have the mortgage payment taken from your account each month.
This way, you’ll be notified of any payment issues before they affect your credit.
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