Financing in New York>Question Details

Peter German, Home Buyer in New York, NY

Are there advantages of having a cosigner if you don't have credit problems?

Asked by Peter German, New York, NY Mon Jul 13, 2009

For example would it allow me to purchase more? My plan is to rent out part of the apartment while living there. This could significantly reduce my out of pocket expense each month, but it would probably be hard to prove this to a lender. Would having a cosigner help or are cosigners only typically used for people with poor credit scores?

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I think some people will differ on this but personally I think a cosignor is only necessary to help if you have poor credit. For the most part cosignors will not allow you to purchase more (especially in this economic climate) and could actually hurt you if negative information in their own credit history comes out. You also make the cosignor wholly liable if you are unable to make payments, and it won't increase your chances of approval either. Youre basically bringing in a second person to do a job one person could do. I wouldnt do it.
0 votes Thank Flag Link Mon Jul 13, 2009
Co signer will just help you with the debt to income ratio to qualify to the loan with no problem specialy if he have good credit, much better.

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Good Luck.
0 votes Thank Flag Link Tue Jul 21, 2009
Hi Peter,
Yes, in some cases co-signer can allow you to "purchase more house".
In the event that their salary is low and they have high monthly obligations they might force you to buy less of a house....so it all depends on the co-signer, his/her financials and the deal itself.
Upon a more careful review of the situation, I can make an opinion whether it's a good move or not....the current info is not enough.
0 votes Thank Flag Link Sat Jul 18, 2009
good morning.....if the home you are buying is a single family residence, you cannot use any rents to lower debt ratio...if it is a mulitple, then you can use 75% of the leases and a copy of the existing leases would be required for the file....when they terminate is also a consideration.....also, there are typically a min. of three tradelines required with at least a one year seasoning in order to be approved fha...there is some flexibility to that....a credit score doesn't automatically mean anything without frist seeing what generates it..someone may have a 700+ score with only two tradelines and less than a yr. history.....a co-signer can be a co-borrower or a non-occupant co-borrower.....typically they are used to help debt-ratios lower, but it cannot be significant......they are also used to add additional credit references to the file.....best regards.bob mcclure- success mortgage partners- plymouth, michigan....
0 votes Thank Flag Link Wed Jul 15, 2009
It depends...you might be able to purchase more. I have a client who owns a rental building and only 75% of the income generated was counted, eventhough the building makes more than enough to cover itself. My client added her mother as a non-occupying co-borrower to increase the amount she could afford to purchase. Her mother has no debt and excellent income/credit so this was a boon to my client.

The downside for the co-borrower is that she is also responsible for the mortgage.

My suggestion is to purchase what you can afford...in my buyer's case she has actual income disallowed so she felt comfortable adding a co-signer.

If you have any other questions, please feel free to drop us a line or give us a ring.

Cheers!
Cree Quaker
http://www.themachreegroup.com
cree@themachreegroup.com
917-691-9788
0 votes Thank Flag Link Wed Jul 15, 2009
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