How Mortgage Co-signing Works

Getting a Mortgage Co-signer

If anyone tells you that getting a co-signer is no big deal, don't be fooled: Getting a co-signer can be challenging.

Essentially, a co-signer is someone who backs up your promise to make payments on a property. Many people need a co-signer in order to get a mortgage. You'll want to find a co-signer who's not only willing but also able to meet the bank's financial criteria. He or she must be the age of majority; in the United States, that's 18. The bank will look at factors that influence the co-signer's ability to pay, such as his or her income, other debts and assets, credit history and credit score. When evaluating the co-signer's creditworthiness, your lender may also factor in the debt of the new mortgage as well as housing costs like taxes, homeowner's insurance and maintenance fees -- even if the agreement between you and the co-signer is that he or she won't be living in the property or paying the mortgage.

Obviously, if you're married, your spouse will likely co-sign on the dotted line to purchase your dream home or investment property. If you're single, it makes sense that a parent, family member or domestic partner be potential co-signers. You want someone you trust and who trusts you. It helps to establish this trust in writing. Draw up an enforceable contract between you and the co-signer, specifying rights and responsibilities, such as who will be occupying and maintaining the property and who will be paying the bills.

As we learned earlier, co-signing a mortgage can get rather hairy. Experts strongly recommend that co-signers consult with their own title company and an attorney and have all documents reviewed before, during and after putting their names on papers to purchase a property.