Cosign for a mortgage

cosign for a mortgage

cosign for a mortgage

There are many situations where you may need to ask for help and in some cases someone to cosign for a mortgage.

John and Angela owned a home together which they shared with their two small children. When it came time for them to end their marriage, Angela was unable to qualify on her own for a mortgage.  They agreed John would refinance the house to pay out her share so they could keep the family home for the children.  John would take over ownership of the house and be responsible for the mortgage payments.  They shared custody and financial responsibility for the children.  No child support or alimony would be paid by either John or Angela.  John knew he would need someone to cosign for a mortgage.

John’s credit history made it difficult to qualify for a mortgage on his own.  He spoke with his parents who told him to speak to a mortgage broker they knew and trusted.  John called me and I reviewed his situation to provide him with options.  He had some past credit issues but his credit score was sufficient to get financing if he had someone to cosign for the mortgage.  He had good income and 10% equity in the house after paying Angela her share.

With his his debt and credit history the lender and insurer required him to have someone c0sign.  John’s father, Ed agreed to cosign for a mortgage.  The addition of Ed’s income and low debt to the application supported by the fact John’s parents owned their own home and a second property, allowed us to meet the guidelines and the lender approved the mortgage.  Ed had agreed to cosign for a mortgage but wasn’t sure about a full 5 year term and John agreed he wanted to be able to qualify on his own as soon as possible.  We set a 1 year term on the mortgage.  John used that time to pay down his credit card, sell his newer vehicle paying off the loan and bought an older vehicle.  This allowed time for his credit score to increase and to lower his debt.  At the end of the 1 year term John qualified for a new 5 year term without someone to cosign for a mortgage at a great low rate.

In this case John was able to achieve his goal to keep the family home, lower mortgage payments so he could still afford to pay off other debt and get back on track for a stronger financial future for him and his children.  Ed was able to help his son without being tied into a long term commitment.

This is just one example- see other blog post regarding legal implications of cosigning for a mortgage.  Also consult with your mortgage broker and lawyer before you cosign for a mortgage.