Posted on: 28th Aug, 2008 10:58am
If you do not meet the income requirements for an FHA home loan, you can use a cosigner to qualify for the loan. FHA loans are primarily offered to those who occupy the property as principal residence. But a cosigner on an FHA loan is not required to use the property as a primary residence. For instance, if your parents own a home of their own, but want to help you purchase a home of your own, they can cosign with you as non-occupying cosigners.
Who can qualify as a cosigner?
A cosigner on an FHA loan needs to meet the following criteria:
- He has to be your blood relative (e.g. father, mother, uncle, etc.) to be a cosigner on the loan.
- If he is not your relative, you will have to prove that you have a long-standing, substantial relationship with him.
- He should meet all the required eligibility requirements (income, debt, credit, etc.) which you as a primary borrower have to meet.
Can anyone having an FHA loan cosign on another FHA loan?
It is possible that an individual has an FHA loan on his own property and he cosigns on your FHA loan on a different property. As long as the cosigner's debt-to-income ratio does not exceed the allowable limit, he can cosign on the FHA loan to help you qualify.
Can a cosigner help you qualify even if you have bad credit?
A cosigner can help you qualify for the FHA loan if you do not have good credit. However, if there are negative items like judgments, collections, etc. on your credit report, you will not get approved for the mortgage. In that case, a cosigner even with very good credit scores cannot help you qualify.
Hello there.
My husband and I are trying to qualify for an FHA loan. My father has offered to co-sign, but I am getting conflicting information.
Here is the scenario:
I am just shy of being approved on my own for the amount we want. Husband has credit issues and cannot qualify. My credit is fine, but I need a bit more income. Husband makes more than enough to qualify us, but his divorce caused a lot of issues.
Father does not live with me, and owns a home, but does not have an FHA mortgage.
Can he be a co-borrower or co-signer or help us at all? Is this a lender choice?
Thank you for your time.
L
My husband and I are trying to qualify for an FHA loan. My father has offered to co-sign, but I am getting conflicting information.
Here is the scenario:
I am just shy of being approved on my own for the amount we want. Husband has credit issues and cannot qualify. My credit is fine, but I need a bit more income. Husband makes more than enough to qualify us, but his divorce caused a lot of issues.
Father does not live with me, and owns a home, but does not have an FHA mortgage.
Can he be a co-borrower or co-signer or help us at all? Is this a lender choice?
Thank you for your time.
L
sld, why would you feel the need for a non-occupant coborrower while refinancing? did someone advise you that would be a way to get cash out?
for cash out loans, you are limited to 85% of the value of your home for your mortgage amount. so, if your home is worth, say, $150K, your maximum loan would be $127500, and so on.
for cash out loans, you are limited to 85% of the value of your home for your mortgage amount. so, if your home is worth, say, $150K, your maximum loan would be $127500, and so on.
HI, my debt to income is not that great so they said that I could use a non occupant coborrower to get approved. I am fine with the value of my home as it is worth 250K and I an trying to borrow 150K. However I have been told differing stories and I wanted to know if I can indeed use a non occupant coborrower and still get some cash out when all is said and done.
if your lender of choice will allow a non-occupant coborrower, then go for it. if your lender of choice will not allow it, find a new lender. at this stage of the process, make a few phone calls.
I'm looking for a bank in PA who will allow my sister to cosign for me as the prime holder on an FHA. One bank told me that no-one does this anymore in PA in this changing economy. We both have great credit scores and I found a small low-cost house so it would not be a lot of money. I, unfortunately, am self-employed so I don't make quite enough to go it alone.
musician, you need to find a different lender who will give you a different opinion. maybe that lender doesn't do it anymore, but it's a prevalent thing around the country to have a non-occupant coborrower help with qualifying.
keep asking around.
keep asking around.
>>One bank told me that no-one does this anymore in PA in this changing economy.
The person who told you that is incorrect. Like George said, it's very common - you should shop around some more.
The person who told you that is incorrect. Like George said, it's very common - you should shop around some more.
all too often, lenders cite "nobody else" as being involved in a particular type of lending without having facts at hand. it is always desirable to check out these sorts of allegations and to survey other lenders to determine what may be at hand.
If I have a very good credit score, some savings, but a bad income (self employment) to debt ratio, and my sister (the cosigner) has a good credit score, a bit more savings, and no outstanding debt (no loans, credit cards - always pays in cash) can we still be approved for the FHA mortgage? Do they combine the amount into what I heard called a 'blended ratio'?
yes, musician, they will blend the two of you into one ratio and that will dramatically improve your opportunity to obtain a mortgage loan.
Hi, my son is engaged and is looking to buy a home. His credit is bad but income is good. His fiancee's credit is good but income is bad. He asked me to cosign with his fiancee as the borrower for the mortgage loan...I see that Fha requires "blood relative" or "substantial long term relationship" neither of which I have with her..Will this application be rejected?...Thanks for the help. G.
Hi, my son is engaged and is looking to buy a home. His credit is bad but income is good. His fiancee's credit is good but income is bad. He asked me to cosign with his fiancee as the borrower for the mortgage loan...I see that Fha requires "blood relative" or "substantial long term relationship" neither of which I have with her..Will this application be rejected?...Thanks for the help. G.
you're right in how you read the guidelines that fha desires a close relationship at the least. you may be able to make a strong case, however, for your being the future mother in law. check with your favorite lender, and if that's not working, you can ask another or another, etc.
Thanks George...future father in law...did not post the picture...am I to assume the lended interprets the FHA guidelines...and the application is not subject to direct FHA review or approval?
in my opinion, DAD in law (sorry), i'd say it is a matter of interpretation. the fha review process would kick in if the loan went to default - there's no direct review.
Thank you kindly for your help!