Grandparents who finished co-signing a mortgage to help their daughter's family get a new home.

Co-Signing A Mortgage

A little-known way to help you obtain a mortgage is having a co-signer on your loan application. Co-signing a mortgage is a great way to help a family member or friend buy a home or refinance a current mortgage. Below I’ll cover what a mortgage co-signer is (aka a non-occupying co-borrower), the differences between a co-signer vs. a co-borrower, the underwriting requirements for a co-signer, and more.

What is a co-signer?

A co-signer for a mortgage loan is someone who agrees to help a primary homebuyer (or homeowner) get qualified for a home loan and accepts financial responsibility for that loan if the primary homebuyer (or homeowner) can no longer afford the payment.

Co-signing a mortgage may help a homebuyer (or homeowner) obtain an underwritten loan approval since an additional person(s) is added to the loan to reduce the overall risk associated with the loan application.

Non-occupying co-borrower.

Another term for co-signing a mortgage is a non-occupying co-borrower. A non-occupying co-borrower is the technical term for someone co-signing a mortgage and is the more common term within the mortgage industry.

The mortgage industry uses the term non-occupying co-borrower rather than co-signer because the person who is co-signing a mortgage does not live in the property. Hence the term “non-occupying.”

What Is The Difference Between A Co-Signer vs. A Co-Borrower?

Here are the main differences between a co-signer vs. a co-borrower. A co-signer does not live in the home, and a co-borrower does. Also, a co-signer typically has no financial ownership of the property, while a co-borrower usually does.

Who Can Be A Co-Signer?

As long as a person is qualified to be a co-signer on a mortgage, there are no restrictions on the relationship between you and the co-signer under the Conforming home loan program. The co-signer could be a parent, a sibling, a relative, a friend, or a co-worker.

The rules for a co-signer under the FHA home loan program are slightly different; more on this below.

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Co-signing a mortgage underwriting requirements

Co-signing a mortgage underwriting requirements will vary from loan program to loan program. And programs like USDA home loans and VA home loans do not allow a co-signer. Also, bank statement mortgages typically do not allow for a co-signer.

The two main loan programs that allow a co-signer are Conforming home loans (Fannie Mae and Freddie Mac) and FHA home loans.

Conforming Underwriting Requirements

Co-signing a mortgage is allowed under the Conforming home loan program. Typically, the co-signer needs a debt-to-income ratio below 45% and a credit score above 620. When it comes to the loan-to-value ratio (LTV), there are no restrictions. You can have an LTV at 97% or lower when you have a co-signer.

  • Cash-out refinances are allowed with a co-signer
  • Citizens and legal residents are allowed
  • The co-signer does not need to be a relative

FHA Underwriting Requirements

Underwriting requirements for a co-signer on an FHA home loan differ slightly from the Conforming home loan program. The co-signer needs a credit score of 580 and must be a citizen and a relative. Co-signer cash-out refinances are not allowed under the FHA home loan program.

Important insider tip about co-signers and the Conforming and FHA loan program; if your co-signer has a lower credit score than you, underwriting will use your co-signer’s credit score. So ensure that your co-signer has the same or higher credit score before entering underwriting; otherwise, your mortgage rate might be negatively impacted.

What does a co-signer need to provide?

The information and documentation a co-signer needs are similar to that of the primary borrower.

Information Needed When Co-Signing A Mortgage

  • Name, address, email address, and telephone number
  • Social security number and date of birth
  • Employment information (or how long they’ve been retired)
  • Income and asset numbers
  • If they own additional property, the key info on each property

Documentation Needed When Co-Signing A Mortgage

  • Income and asset documents
  • If they own additional property, then a mortgage statement and homeowners insurance declaration page for each property owned. If a property has an HOA, then documentation from the HOA showing the monthly amount due

For a more in-depth review of the documentation needed, please see;

Also, it’s important you have a discussion with your loan officer about what their underwriter wants from the co-signer. Lender requirements may differ from one lender to the next.

How Do I Get An Approval With A Co-Signer?

The process of obtaining an approval with a co-signer is similar to when a loan application does not have a co-signer. The only difference is in the initial stage, where you and the co-signer prepare for the initial loan application.

After that, it’s the same process. Once the loan officer has a completed file, they will submit everything to the underwriter for an initial review.

What Are The Alternatives To Having A Co-Signer?

There are alternatives to having a co-signer on a mortgage application. My first suggestion is to consider an FHA home loan or, if you are a veteran, a VA home loan. These loan programs have flexible underwriting guidelines, especially for first-time homebuyers.

Also, it would help if you researched your downpayment assistance options. In some areas, a homebuyer may qualify for government assistance with their downpayment. Also, a family member can “gift” your downpayment or part of the downpayment.

Pros and cons of co-signing a mortgage

Here are the pros and cons of co-signing a mortgage.


  • Helping someone you know to purchase a home or refinance into a better mortgage.
  • The on-time payment history will help improve the credit score of the co-signing person.


  • The person co-signing a mortgage is legally obligated to pay the debt if the primary borrower can no longer afford the payment.
  • If a payment is more than thirty days late, that will impact your credit history and score.
  • Time and effort. The person who is co-signing will have to spend time and effort during the loan application process.

Co-signing a mortgage faqs

Here are some FAQs about co-signing a mortgage.

I have a low credit score; will a co-signer with a higher credit score lower my rate?

No. A co-signer will only help you get an approval, not a lower rate. Underwriters use the lowest middle score of all the borrowers on the loan application, including the non-occupying co-borrower. So if you have a 660 credit score and your co-signer has a 740 credit score, the underwriter will use the 660, not the 740.

Can I have more than one co-signer?

Absolutely. Let’s say you want both of your parents to co-sign; not a problem that is allowed. Co-signing a mortgage is not limited to just one person; you can have multiple non-occupying co-borrowers.

Am I responsible for my co-signers debts?

No. Just because the co-signer adds your debt to their financial obligations does not mean you are adding any of their debt to your financial obligations.

Can the co-signer contribute to the down payment?

Under most circumstances, the person co-signing a mortgage can contribute towards the down payment. You’ll want to double-check with your loan officer to ensure you meet the necessary underwriting guidelines for down payment contributions from non-occupying co-borrowers.

Can a co-signer be removed from the mortgage once my finances have improved?

The only way to remove a co-signer is to pay off the existing mortgage. There are three options; pay off the balance with cash on hand, refinance to pay off the current balance and remove the co-signer, or third option is to sell the home to pay off the original mortgage.

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Should you consider a co-signer?

If you have trouble getting qualified for a mortgage, consider a co-signer. There are two great home loan programs, Conforming and FHA, that allow for someone to help with co-signing a mortgage, and getting qualified under these programs is a relatively straightforward process.

Be sure to talk with your loan officer about the pros and cons of having a co-signer and what their requirements are for non-occupying co-borrowers. If you think it makes financial sense and have someone willing to co-sign, then I suggest you consider having one.

Loan Officer Kevin O'Connor

About The Author

Loan Officer Kevin O'Connor has over 17 years of experience as a Mortgage Loan Originator and is a trusted resource for mortgage education and information. He's the content creator of K.O. Home Loan Solutions and is licensed by the state of California and the Nationwide Mortgage Licensing System. He has a top rating with the Better Business Bureau, Google, Yelp, and Zillow. You can contact him at 1-800-550-5538. CA DRE #01499872 / NMLS #247447