Should You Co-Sign on Someone's Mortgage? | Homespire Mortgage

Should you co-sign on someone’s mortgage loan? ✍️🏡A co-signer is someone who applies for a loan with someone else (who maybe doesn’t have great credit or is just starting out and hasn’t had time to really build their credit) and agrees to pay that debt if the borrower defaults on the loan. A co-signer is someone with great credit who will boost the borrower’s financial credibility.
Let’s look at some pros and cons:
✅ Pros: The lender will look at the borrower and co-signer’s credit history together as a whole. This could allow the borrower to qualify for a higher loan amount. And, of course, the borrower gets the opportunity to buy a home when they might not have otherwise been able to.
🚫 Cons: As the co-signer, you are legally responsible if the borrower defaults and the property is foreclosed upon. Also consider that this loan will become a part of your credit report and affect your debt to income ratio and potentially your ability to buy another property.
Bottom line - If you have absolute faith that the borrower can and will make their payments AND if they default, you’re in a financial position to cover that debt, then go for it. It’s definitely an act of love that can truly bless someone.
If you have questions, Homespire can help. Visit www.homespiremortgage.com to connect with a Homespire Loan Officer today.
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Corporate Office: 9711 Washingtonian Blvd., Suite 500, Gaithersburg, MD 20878. 1-800-531-5395 This is not an offer for a loan or any type of extension. Eligibility for a loan or extension of credit from Homespire Mortgage Corporation is subject to completion of a loan application, credit, income, and employment qualification, and meeting established underwriting criteria. Rates are subject to change without notice based on market conditions. See Loan Consultant for information on program income limits, buyer contribution, area median income, debt requirements, and other application details.