I am trying to buy a house and will be going the FHA route. Can i use my sister, who has no FICO score, as a non-occupant co-signor?

Asked by adamk135, Chicago, IL Sun Nov 25, 2012

I have a median FICO score in the 690's. The only thing stopping me from getting the house is my Debt-to-Income ratio. My sister has no FICO score due to lack of credit history. She lives with our mom and has no debts. She works full time and has been at her job for more than 2 years.

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Sue Archer Reynolds’ answer
Sue Archer R…, Agent, Palm Harbor, FL
Sun Nov 25, 2012
There's more implications than you mention here if your sister co-signs for the home. First, she needs to establish a credit score. She can possibly do that with non-traditional means such as cell phone bills, rental payment receipts and things like that. And it's in her best interest to establish credit history. Most lenders can help her, or she can contact Blue Water Credit and ask them to help her.

But co-signing on a mortgage for you is not normally in her best interest. She takes on 30 years worth of obligation for a debt that she does not get the benefit of enjoying. 30 years is a long time,and should you at any time default on that loan, it would reflect negatively on her. In fact, she would be expected to pay it back should you not be able to pay. Should she EVER want to get a home of her own, she would be showing 100% obligation on your mortgage and have difficulty getting one for her own.

You might want to consider whether there is another alternative, or discussing the full implications of her co-signing so that it's clearly understood.
1 vote
This would be a temporary thing. Something i didn't mention was that i have a husband. We were all set to close on the house, but he got laid off just prior to us closing. He is collecting unemployment. This mortgage would be less than what we are currently paying for rent. So yes, we will have more than enough income to afford the mortgage but he cannot be on the loan due to no employment. My sister's income will be enough to bring our DTI into optimal range. We would then refi her out of the mortgage once my husband gets a new job and establishes the required employment service time per FHA standards (so probably 2 years). I can't see how this can hurt my sis's credit considering she has none. I just need to know if it is possible to use her. She understands all the risks involved. thanks
Flag Mon Nov 26, 2012
George Raymo…, Mortgage Broker Or Lender, Fort Worth, TX
Mon Apr 22, 2013
This is tricky for some lenders, but we can manually underwrite files. That means we don't have to have a AUS Approval (automated underwriting system) in order to fund a loan. Also, keep in mind that a co-borrower for a FHA does not have to live with the borrower. It's something very few people know. Please do not fall prey to some lenders who say this is an easy deal. These are complicated and we have to tackle some key issue upfront so you don't blown out of escrow. Please make sure you choose an experienced Loan Officer with a history of happy customers. FYI, there are some pretty cool programs out there, especially if you are going to buy in CA as your zip code indicates. We are licensed in 18 states.

Best of Luck!

http://www.trulia.com/blog/george_raymondo/2011/08/californi…
Web Reference:  http://www.AFN-Loans.com
0 votes
Jaime Becker, Agent, Sacramento, CA
Mon Apr 22, 2013
Hi Adam

This is definitely a question for your lender.
0 votes
Bud Zeller, Agent, Folsom, CA
Mon Apr 22, 2013
Check with a local lender about the FHA rout.
0 votes
Bud Zeller, Agent, Folsom, CA
Sun Dec 23, 2012
Perhaps, but this should be a consideration discussed with your lender.
0 votes
Tony Singh, Agent, Elk Grove, CA
Fri Nov 30, 2012
I'd love to help you. Please contact me and we can discuss your options. (916) 236-5686 or email me at tsigngh@aresrealty.com.
0 votes
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