Michelle,

Co-signor a.k.a. Non-Occupying Co-Borrower (in the language of financing) are a recognized and acceptable form of mortgage pre-approval.

Your Father-in-law will have to qualify for the home along with you and your husband. You all should be aware that his co-sigining on your note can obligate him to make the payments should you and your husband not be able to fulfill the obligation.

Also the mortgage he co-signs on most likely will show up in his credit report and could impact his ability to secure his own future financing.

When shopping for this type of financing you might run into a mortgage provider who wants to charge for the extra work involved with a non-occupant co-borrower. Lenders generally do not charge for this type of underwriting. Any such charges are most likley those imposed by your broker/banker for the extra work involved in processing this type of mortgage.

Good Luck!

Trey Bowden
(405) 340-3277

Tue May 13 2008, 07:56

Speak to your lender. This is very common with a lot of the first-time home buyers and young couples that I work with. Often times they with have a parent with good credit and income cosign the loan for them to help them qualify. A cosigner is not necessarily responsible for any of the monthly mortgage payment - unless that is an arrangement you have worked out - but if you default on your loan the cosigner will be held accountable. Good luck!

Tue May 13 2008, 06:04