Financing in Romeoville>Question Details

John Holmes, Real Estate Pro in Romeoville, IL

Having a family member co-sign a mortgage

Asked by John Holmes, Romeoville, IL Wed Feb 10, 2010

Does having a cosigner (a mother in law) cosign my mortgage lower the borrowe's(me) debt to income ratio?

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Yes, having a non-occupant co-borrower on the loan can be used to lower the overall debt to income calcuation used in the loan approval process. Keep in mind that not only will the co-borrowers income be added to the application, but that their liabilities will be included as well. FHA loans will not require you to maintain a specific debt to income ratio while conventional (Fannie or Freddie) loans will, depending on your overall down payment. Please do not hesitate to contact me w/ any additional questions, Thanks
0 votes Thank Flag Link Wed Feb 10, 2010
It puts your family member in a bind if anything ever happens and the MUST pay YOUR mortgage. Try to improve your credit so you could buy without this happening.
0 votes Thank Flag Link Wed Feb 10, 2010

Both your mother-in-laws income and debt will be added to yours to determine what your combined DTI is. If its low enough, you'll be fine in that respect. You will still have to show the ability income wise to at least make the mortgage payment on your own. Also in keep in mind, your mother-in-law most qualify credit score and credit history wise as well. Hopefully both are good enough. Lastly, if her credit score happens to be lower than yours, that will be the score the lender will use to also determine your interest rate and closing costs.
0 votes Thank Flag Link Wed Feb 10, 2010
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