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When to Apply for a Mortgage Without Your Spouse

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : By clicking “See Offers” you’ll be directed to our parent company, LendingTree. Based on your creditworthiness you may be matched with up to five different lenders.

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In most cases, two borrowers are better than one when it comes to getting a mortgage. If you’re buying a home with your spouse, you’ll likely have more income, and that could raise your chances of qualifying for a mortgage. Plus, lenders are often more comfortable lending to two people instead of one.

However, there are situations when it makes more sense for you to apply on your own. If your spouse has significantly lower credit scores, a lot of debt, or just started a new job — you might want to apply for a mortgage without them.

We’ll cover those circumstances and what they will mean for mortgage qualifying in this article about when to apply for a mortgage without your spouse.

Three reasons to apply for a mortgage without your spouse

While your spouse may just not want to be on the mortgage because they don’t want the paperwork hassle or the responsibility, there are other more common reasons it’s wise to get pre-approved for a mortgage without your spouse.

Your spouse has low credit scores

The most common reason to apply on your own is because your scores are higher than your spouse’s. The mortgage qualifying system requires lenders use the lower of the two borrowers’ credit scores to get a mortgage. If your spouse’s scores are below the minimum required for approval under traditional conventional, FHA and VA loan programs, this could be a big issue.

In other cases it may be because you want to get the lowest interest rate possible, and you don’t need your spouse’s income to qualify. The lower your credit score, the higher your interest rate will be. Higher interest rates cost you more every month, and could mean you have to scale back on how much house you can purchase.

Your spouse has a lot of debt

It’s not uncommon for couples to have their own credit before they get married; in many cases the most prominent debt that follows a couple into marriage is student loans. So if your spouse has a lot of student loan debt, regardless of whether it still in deferment or not, it may be best to leave them off the loan if you have enough income to qualify on your own for the mortgage you need.

This is also true of revolving debt and large car loans. Or maybe one of you cosigned on a relative’s car loan, not realizing that the payments would be counted against you once you decided to buy a house. The bottom line is that your combined debt counts against your combined income. If one of you has a lot of debt, but very little income, that’s the person who should be left off the loan application.

Your spouse is newly self-employed

Being an entrepreneur can give you the freedom to do something you love without the constraints of a boss telling you what to do.

However, if you recently opened a business and incurred a lot of expenses that resulted in a first-year loss, it may be best to bow out of the loan application. The loss could actually become a liability if it shows up on your personal tax returns, reducing your qualifying income.

Or if the income is very complex, requiring a lot of explanations from a CPA to understand how the money ultimately flows into your pocket, it may be worthwhile to leave off to avoid unnecessarily complex documentation requirements.

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Why your spouse’s debt may be counted against you even if they aren’t on the loan

Even if you leave your spouse off your mortgage application, you may find out that all of their monthly debt is still counting against you. Unfortunately, that may be the case if you live in a community property state, and are applying for a government-backed loan such as an FHA, VA or USDA loan.

How community property states affect mortgage lending

In a community property state, the assets of each spouse are considered assets of the couple. That also means that the debts of the individuals become joint obligations once they are married, as well.

Below is a list of the nine community property states in the U.S.

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

Depending on the loan program you select, your spouse’s debt may still end up being counted against you in a community property state.

Loan programs that make it harder to qualify in community property states

The good news is only government-backed loan programs are affected by community property laws. If you are applying for a Fannie Mae or Freddie Mac 30-year fixed conventional loan, you can apply individually even if you are married. You will not have to count your spouse’s debt against your income even in a community property state.

However, government loan programs are another story. We’ll cover how they are affected by community property laws next.

FHA loans

Government-backed loan programs provide a great deal of flexibility when it comes to qualifying for a mortgage. Federal Housing Administration (FHA) loans are insured by the federal government and are a popular first-time homebuyer program, allowing for a 3.5% down payment and credit scores as low as 580 (or even 500 with a 10% down payment). FHA loans also allow debt-to-income ratios to rise above 50% in some cases. Your debt-to-income ratio is a measure of how much total debt you have compared to your total before-tax income.

There is one important caveat if you are applying for an FHA loan to purchase a home in a community property state without your spouse — the lender will still have to pull your spouse’s credit report. If your spouse has debt that is not already referenced on your credit report, the monthly payments will be counted against you. This could affect the amount you qualify for.

VA loans

If you’re an active duty servicemember or retired military veteran, the Veterans Administration home loan program offers the most flexible qualifying guidelines for any mortgage program offered to current and aspiring homeowners.

If you’re eligible based on your service, you can buy a home with 0% down payment, no minimum credit score and DTI ratios in excess of the limits FHA allows. In fact, the VA doesn’t actually have a maximum DTI, opting instead to use a calculation called residual income that looks at how much money you have left over after taxes, monthly debts and home maintenance expenses.

The only place where they aren’t flexible is when it comes to spousal debt in a community property state. Like the FHA, a spouse’s debt has to be counted against your income, and that could reduce your borrowing power significantly.

USDA loans

The United States Department of Agriculture offers a home loan program for low- to moderate- income borrowers in designated rural areas with low down payment options and much of the flexibility of FHA loans. The DTI maximum is 41% and credit score minimum is 640 — slightly more stringent than the FHA — and they also require that a spouse’s debt be counted to qualify for a loan, even if the spouse is not on the application.

How applying without your spouse may affect your mortgage

There are a few adjustments you may need to make if you have to qualify for a mortgage without your spouse. You should take this into consideration before you go solo on your loan application.

You may qualify for less loan

Even if your spouse makes a lot of money, if they don’t apply on the loan, the income can’t be used to qualify. Be sure you’ve run your qualifying numbers based on the spouse that is going to be on the application.

You may need extra explanations and documents related to your assets

If you have joint banking accounts, your spouse may have to provide an “access letter,” which is basically a letter verifying he or she has access to all of the funds in your joint accounts for the purposes of the loan. If your spouse also deposits large income checks, the lender may require they be documented with copies of the canceled checks and letters of explanation confirming where the deposits came from.

Whether your spouse will be on title to the property

A non-borrowing spouse is allowed to be on the title to your property. You just need to understand that even though they have ownership interest in the property, they have no responsibility for the mortgage unless they apply with you for the loan. That means you have 100% of the responsibility for the mortgage, but receive 50% of the equity in the home in the event is sold.

May have to avoid government loan programs

If you live in a community property state, depending on how much debt your spouse has, you may have to avoid government loan programs. That may put you at a disadvantage because conventional loan programs require a minimum credit score of 620, and a maximum DTI of no more than 50%.

Final thoughts about applying for a mortgage without your spouse

Buying a home is often a huge milestone in a married couple’s life. But if one spouse has to be left out due to low income or poor credit, that may make them feel left out or picked on by the loan process.

The good news is that a non-borrowing spouse can always be added with a refinance loan in the future. A refinance loan pays off an existing mortgage, usually to lower payments, take some cash-out to pay off other debts or to access funds to make home improvements.

As rates and home prices rise and fall, there are inevitably opportunities to take advantage of a refinance, and if the circumstances that kept the non-borrowing spouse off the application have changed, they’ll be able to be added to a joint application for mortgage financing in the future.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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APR vs Interest Rate: Understanding the Difference

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

It’s common for homebuyers to focus on interest rates while shopping for a mortgage, however, there’s another number that might even be more important.

While a low interest rate is appealing and directly impacts your monthly mortgage payment, it’s also important to look at each loan’s annual percentage rate, which provides a clearer picture of how much the loan will cost you when other fees are factored in.

The APR includes the interest rate as well as other fees and costs, and is expressed as a percentage. The interest rate only includes interest paid to the bank.

The difference between mortgage APRs and interest rates

An annual percentage rate (APR) is a broad measure of what it costs to borrow a loan. It includes the interest rate as well as other fees and costs.

The difference between an APR and an interest rate is that an APR gives borrowers a truer picture of how much the loan will cost them. Although an APR is expressed as rate just like interest, it is not related to your monthly payment — which is calculated using only the interest rate. Instead, an APR reflects the interest rate along with fees and other one-time costs a borrower will pay to get a mortgage.

“You can find a mortgage that has a 4% interest rate, but with a bunch of fees, that APR may be 4.6% or 4.7%,” said Todd Nelson, senior vice president of strategic partnership with online lender LightStream. “With all of those fees baked in, they are going to swing the interest rate.”

For example, one lender may charge no fees, so the loan’s APR and interest rate are essentially the same. The second lender may charge a 5% origination fee, which will increase the APR on that loan.

How APRs impact mortgages

Lenders calculate an APR by adding fees and costs to the mortgage interest rate and creating a new price for the loan. Let’s look at an example:

A lender approves a $100,000 mortgage at a 4.5% interest rate. The borrower decided to buy one discount point, which costs $1,000, to get the 4.5% rate (a discount point is a fee paid to the lender in exchange for a reduced interest rate). The loan also includes $900 in fees, which are being financed in the mortgage.

With the fees and costs mentioned above added to the loan, the adjusted starting mortgage balance becomes $101,900. The monthly payment (which consists of the principal plus interest) is then $516.31 with the 4.5% interest rate, compared with $506.69 if the balance had remained at $100,000.

To find the APR, the lender returns to the original loan amount of $100,000 and calculates the interest rate that would create a monthly payment of $516.31. In this example, that APR would be approximately 4.661%.

APRs will vary between lenders, as no two lenders are exactly alike. Some may offer competitive interest rates, but then tack on expensive fees and costs. Lenders with the same interest rate and APR probably aren’t charging any fees on that loan, and lenders that offer APR and interest rates that are close are likely charging a lower amount of fees and extra costs.

In short, APR gives you a way to compare two lenders offering the same interest rate so you make the smartest possible decision about your mortgage.

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What factors influence an APR?

APRs change as interest rates fluctuate, but they’re more impacted by lender costs and fees. Below are some of the common charges that affect APRs:

  • Discount points: Lenders allow buyers to purchase points in return for a lower interest rate. The cost of a point is equal to 1% of the mortgage amount and typically lowers the interest rate on the loan by an eighth of a percentage point. For example, a buyer approved for a $100,000 loan could buy three points, at $1,000 each, to lower the interest rate from 4.5 to 4.125.
  • Loan origination fees: Loan origination fees typically average about 1% of the loan amount. This cost can be especially significant for larger loans.
  • Loan processing: This fee, which some lenders will negotiate, pays for the cost of processing a mortgage application.
  • Underwriting: These fees cover an underwriter’s review of a loan application, including the borrower’s income, credit history, assets and liabilities and property appraisal, to determine whether the lender should approve the loan application and what terms should be applied to the loan.
  • Appraisal review: Some lenders pay an outside reviewer to make sure an appraisal meets underwriting standards and that the appraiser has submitted an accurate report of the home’s value.
  • Document drawing: Lenders often charge a fee for creating mortgage documents for a loan.

Closing costs that aren’t commonly in an APR calculation are notary fees, credit report costs, title insurance and escrow services, home appraisal, home inspection, attorney fees, document preparation and recording fees.

Because an APR includes a loan’s interest rate, rising interest rates will increase the APR for several products including mortgages, auto loans and other types of loans and credit.

How interest rates affect mortgages

A mortgage interest rate is the rate a lender uses to determine how much to charge a homebuyer for borrowing money. Mortgage rates can either be fixed or adjustable.

Fixed mortgage rates don’t change over the life of a loan. For example, if you take out a 30-year loan at a 4.25% interest rate, that rate will stay the same — regardless of changes in the economy and market index — until the loan is paid off.

On the other hand, adjustable-rate mortgages (ARMs) will fluctuate as market conditions change after an introductory period, often set at five or seven years. That means your interest rate could go up or down depending on the economy, which will in turn raise or lower your mortgage payments.

ARMs often start with a lower interest rate than a fixed-rate mortgage, but can dramatically increase after the intro period ends.

If you are considering an ARM, it’s important to talk to lenders first about what an adjustable rate could mean for your monthly mortgage payments. Be sure to ask the following questions:

  • How long is the introductory fixed-rate period?
  • How often does the interest rate adjust after the fixed-rate period ends?
  • How does this loan compare to fixed-rate mortgage options?
  • How much will the monthly payment and interest rate increase with each adjustment?
  • What is the cap on how high or low the interest rate can go?
  • Is the monthly payment still affordable if the interest rate reaches the maximum allowed under the loan contract?

What factors influence an interest rate?

Don’t be surprised if a lender’s mortgage rate is higher than what was advertised. Each loan’s interest rate is primarily determined by market conditions and by the borrower’s financial health. There are several factors that help determine your rate, including:

  • Your credit score: Borrowers with higher credit scores generally receive better interest rates.
  • Your down payment: Lenders may offer a lower rate to borrowers who can make a larger down payment, which often is an indicator that the borrower is financially secure and more likely to pay back the loan.
  • The loan term: The number of months you agree to pay back the loan can make a difference. Generally, a shorter-term loan will have a lower rate than a longer-term loan — but higher monthly payments.
  • The loan amount: Interest rates can be different for loan amounts that are unusually large or small.
  • The loan type: While many borrowers apply for conventional mortgages, the federal government offers loan programs through the FHA, USDA and VA that may have lower interest rates.
  • The location of the property: Interest rates are different in rural and urban areas, and can also vary by county.

Below, we use MagnifyMoney’s mortgage calculator to illustrate how interest rates can affect monthly mortgage payments.

Loan amount$250,000$250,000
Interest rate3.84%4.20%
Monthly payment
(Principal and interest)
$1,170.59$1,222.54
Interest paid after five years$8,651.39$9,517.96

As shown above, an interest rate increase of even less than a half-percent could bump your monthly payment up by nearly $52, and your interest paid over the first five years by more than $800.

Mortgage comparison-shopping tips

When you’re shopping for a mortgage, it’s wise to gather quotes from multiple lenders to ensure you find the best mortgage terms available. It’s also important to get those mortgage quotes on the same day and around the same time.

Online marketplaces such as LendingTree can provide real-time loan offers from multiple lenders, which makes it easier to compare mortgage APRs and interest rates.

If a loan’s APR matches its interest rate, you likely have a good deal. Otherwise, investigate the costs and fees behind a quoted APR to determine which mortgage offer is the best deal. The most effective way to do so is by comparing the Loan Estimate documents you receive from each lender after submitting a mortgage application.

Recent research underscores the significance of shopping around. Homebuyers could realize a potential interest savings of nearly $50,000 over the life of a 30-year, fixed-rate $300,000 loan by comparison shopping for the best APR.

Lastly, once you’ve found the best rate, ask your lender about your rate lock options.

What about APRs on ARMs?

The annual percentage rate on an adjustable-rate mortgage won’t apply for the life of the loan, since the interest rate and monthly payment will change as the economy fluctuates. The APR only applies during the loan’s initial fixed-rate period, and no one can predict how much the rate will increase in the years that follow.

For example, a 7/1 ARM has a fixed interest rate for the first seven years that is determined by the market conditions on the day the loan was closed. After seven years, the interest rate will adjust annually, based on the movement of the index the ARM is tied to, which is commonly the one-year LIBOR.

The new rate likely won’t be the same as it was when the loan was originated. Mortgage rates fluctuate daily, and no economic forecaster can accurately predict how the index will change in the future.

The bottom line

While lenders often push their low interest rates when they advertise loans, Nelson said it’s vital that consumers check APRs when shopping around, and pay attention to how loan advertisements are worded. Lenders may advertise “no hidden fees,” he said, but that might just mean there are other fees that simply aren’t hidden.

“Look for a lender that’s transparent about disclosing all of those fees,” Nelson said.

Ask for clarity about any cost estimates you don’t understand, and try to negotiate lender fees where possible.

This article contains links to LendingTree, our parent company.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Marty Minchin
Marty Minchin |

Marty Minchin is a writer at MagnifyMoney. You can email Marty here

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Risks to Consider Before Co-signing Your Kid’s Mortgage

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : By clicking “See Offers” you’ll be directed to our parent company, LendingTree. Based on your creditworthiness you may be matched with up to five different lenders.

When you cosign on a mortgage, you become just as responsible for the loan as the primary borrower — and you can suffer major consequences if they make late payments or default.

Still, you might feel compelled to help out a family member by adding your name to someone else’s loan application, particularly if your daughter or son needs help buying their first home.

Cosigning a mortgage for your child is a serious decision, and parents should weigh all of the risks before making any promises. We asked financial experts which risks are worth worrying about to help clear out the noise.

These risks include potential damage to your own credit score if the other borrower doesn’t make payments, and more difficulty if you want to get a new mortgage yourself down the line.

Why you might consider being a cosigner

Affording a home can be a challenge for many potential homebuyers — especially millennials. Student debt and stagnant incomes likely share a good portion of the blame. Nearly half of the millennial generation carries student loan debt, with median outstanding balances as high as $30,000, according to the 2019 Homebuyers and Sellers Generational Trends Report from the National Association of REALTORS.

That can make it hard to qualify for a home mortgage. Loan officers have to take a borrower’s total financial picture into account when reviewing their application, in particular the person’s income when compared with their monthly debt payments. That makes it increasingly hard to qualify for a mortgage while carrying a hefty student loan balance or other debt.

Seeing your child deal with this burden may prompt you to help them reach their homeownership goal by becoming their cosigner. With your signature on the mortgage, lenders add your income into their calculations of whether it’s safe to issue the loan. This can help borderline borrowers qualify for a mortgage, especially if they’re having trouble like too much debt or a limited credit history.

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4 risks to consider before cosigning your kid’s mortgage

Before you agree to this commitment, consider these four risks of cosigning a home loan for your child.

1. You’re also responsible for the mortgage payments

Not only is your child responsible for their mortgage payments, but you will also be, too. As a cosigner, you’re equally on the hook for those payments and can face negative consequences if your child defaults on their loan.

If you’re expecting to retire during the life of the mortgage, cosigning is an even larger risk, as you may be living on a fixed income.

Dublin, Ohio-based certified financial planner Mark Beaver said he’d be wary of a parent cosigning a mortgage for their adult child.

By cosigning, you effectively take on a risk the bank doesn’t want.

“The risk is, ‘What can happen that can make this blow up?’” added Leon LaBrecque, a CFP and lawyer based in Troy, Mich.

Bottom line: If you wouldn’t be able to comfortably afford the mortgage payments should your child drop the ball, don’t cosign.

“If they need a cosigner, it likely means they cannot afford the house, otherwise the bank wouldn’t require the cosigner,” Beaver said.

2. Your credit profile is affected

Once you become a cosigner, your kid’s mortgage account will also show up on your credit report, even if you haven’t taken over payments. If there is so much as one missed payment, your credit score could take a hit.

This may not be the end of the world for an older parent who doesn’t anticipate needing any new lines of credit in the future, Beaver said, but it’s still wise to be cautious.

You might think your child is ready to become a homeowner, but a closer look at their finances may reveal they aren’t yet that financially mature. Don’t be afraid to ask about their income and spending habits. You should have a good idea of your child’s money management skills before you agree to help them.

“Sure, we don’t want to meddle and pry into our children’s business; however, you are putting yourself financially on the line,” explained John Barnes, a CFP based in Andover, Mass. “They need to understand that and be open about their own habits.”

3. Your future borrowing plans will be affected

Since the mortgage will also appear on your credit report, this additional account can make it tougher for you to qualify for additional credit.

If you dreamed of one day owning a vacation home, just know that a lender will have to consider your child’s mortgage as part of your overall debt-to-income (DTI) ratio` as well. This measures your monthly debt payments as compared with your income.

Although cosigning a large loan generally puts a temporary crimp in your ability to borrow, keep in mind you may be affected differently based on the dollar amount of the loan and your own credit history and financial situation.

4. Your relationship can change

Serving as the cosigner on your kid’s mortgage is bound to change the dynamics of your relationship. Your financial futures will be entangled for as long as 30 years, depending on the time it takes them to pay off the loan.

Howard Erman, a CFP based in Seal Beach, Calif., said not to let your feelings get in the way of making the correct decision for your budget. Think of how often you communicate and the depth and strength of your relationship with your child. If saying no might create serious tension in your relationship, you likely dodged a bullet.

“If your child conditions their love on getting money, then the parent has a much bigger problem,” Erman said.

Similarly, you should consider how your relationship would be affected if your child ends up defaulting on the mortgage, leaving it up to you to satisfy the payments.

How to remove yourself as a mortgage cosigner

Fortunately, your cosigning responsibilities don’t have to last as long as your child is repaying their mortgage. Here are a few ways you can be removed as a cosigner:

  • Submit a removal request. Some lenders allow a cosigner to be removed from a mortgage after the borrower has established a history of on-time payments. Check with your child’s lender for details on their removal guidelines.
  • Refinance the mortgage. Your child may be required to refinance their mortgage in order to remove you as their cosigner. The caveat here is that in order to get approved for a refinance, they must qualify for a mortgage on their own.
  • Pay off the outstanding balance. As a last resort and if your financial situation allows, you could pay off the remaining balance on your kid’s mortgage. You could also encourage them to sell the home and work out a way to split the proceeds.

Pros and cons of cosigning

Cosigning a loan as large as a mortgage is a major decision that requires a lot of responsibility on your end, should things go wrong. Be sure you weigh the ups and downs before you say yes.

ProsCons
  • You’re helping the borrower get a loan they wouldn’t otherwise qualify for.
  • The borrower is able to build their credit history.
  • As long as the payments are made on time, your credit report won’t be negatively affected.
  • Once the borrower has established a good payment history, you might be able to request removal from the loan.

  • Your debt-to-income ratio will increase.
  • You may have trouble qualifying for new credit.
  • The borrower’s missed payments can negatively affect your credit report and score.
  • In some cases, the only way to remove yourself as cosigner is for the borrower to refinance the loan.

There is a chance you’ll need to deny your child’s request to cosign the loan. If you feel pressured to say yes, but really want to say no, Barnes suggests you say no and place the blame on a financial advisor.

“Having (someone like) me say no is like a doctor telling a patient he or she can’t run the marathon until that ankle is healed. It is the same principle,” Barnes said, adding that it’s best to meet with a financial planner who can analyze the situation and give a recommendation for action when you’re facing the decision to cosign a loan.

If you choose to take the blame yourself, you may want to explain your reasoning to your child if you feel it’s warranted. If you declined based on something they can change, give them a plan to follow that would eventually help you feel comfortable saying yes.

If you must say no, try to do so in a way that will motivate them toward the goal rather than deflate them. Erman recommends lovingly explaining to your child how important it is for them to be able to achieve this milestone on their own.

Alternative ways to help your child get a mortgage

For parents who want to help out but don’t want to take on the risks of cosigning, LaBrecque suggests instead giving your child a down payment and treating it as an advance in the estate plan. So, for example, if you “gift” your kid $30,000 to make a down payment, you would reduce their inheritance by $30,000.

The “gift the down payment” method also grants you some additional benefits.

“The down payment gift is a quick victory,” LaBrecque explained. “The kid’s now made their bed with the mortgage; let them sleep in it.”

Similarly, you could choose to help your child pay down their debts, so they’ll be in a better position to get approved on their own.

The bottom line

The best way to protect yourself against the risks of cosigning is to have a backup plan.

“If a child is responsible with money, then I generally do not see a problem with cosigning a loan, provided insurance is in place to protect the cosigner,” Barnes said.

Make sure your child has life and disability insurances in place, should they unexpectedly pass away or become disabled and unable to work, he added. These policies can help cover the mortgage.

The insurance payments will also help to protect your own credit history and future borrowing power. However, the policies would be useless in the event your child suffers a job loss. If that happens, insurance will not pay your bill. “So even if you are well-insured, budgeting is vitally important,” Beaver said.

If you choose to take on the risk and cosign, make sure you and your child have a plan in place that details the monthly payments, when to sell and what would happen if your child is unable to make payments for any reason, Barnes added.

LaBrecque also shared some recommendations:

  • Get your name on the deed.
  • Don’t forget to address present or future spouses.

Additionally, ask your lawyer about having your kid (and their spouse, if applicable) sign back a quit-claim deed to the parent, LaBrecque said. If you get one, you’ll be protected in case the marriage goes south or payments are made late, because you would be able to remove a potential ex off the note.

This article contains links to LendingTree, our parent company.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at [email protected]

Crissinda Ponder
Crissinda Ponder |

Crissinda Ponder is a writer at MagnifyMoney. You can email Crissinda here

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