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How Mortgage Co-signing Works


Responsibilities of Mortgage Co-signing
No matter if you're co-signing for a partner, family member or friend, understand the consequences of your decision. Putting your name on a mortgage means you're legally responsible for that property and the taxes and maintenance fees that come with it.
No matter if you're co-signing for a partner, family member or friend, understand the consequences of your decision. Putting your name on a mortgage means you're legally responsible for that property and the taxes and maintenance fees that come with it.

Once you agree to co-sign a mortgage, you'll go through nearly the same process as if you were applying for the home loan yourself. If you're buying real estate in the United States, there's a good chance this process begins by pre-qualifying for a mortgage, which is like filing an initial application for a mortgage. The result of pre-qualifying is that you'll learn how much money a bank will lend you to shop for and buy a house.

Whether you're the one buying a house or the one co-signing for someone else, once there's a contract on the home, you and the co-signer will complete an official application form for the mortgage, sign it and give it to the mortgage broker or loan officer, along with other documents, like authorization to verify your employment, income and credit history. But the process is far from over at this point. That bank representative will ask you a slew of questions, and he or she may contact you a number of times with questions up until the property purchase or settlement date. Lenders will do their due diligence and continuously verify your income, debts, assets and other factors that will impact your ability to pay the mortgage until the very hour you close the deal on the property. Even throughout the life of the loan, the mortgage company may do a credit check from time to time to ensure you can continue to make payments on the mortgage.

Starting the day you and your friend, family member or partner purchase the property, you're legally responsible for property taxes as long as your name is on the deed or title. You're also obligated to the bank to maintain homeowner's insurance until the conditions of the loan are satisfied. So, it's important to keep a copy of the contract you and your co-signer drew up in a safe place, should the need arise to refer to it.