Should You Both Be Co-Signers on Your Home Loan?

It’s very tempting for spouses or partners to co-sign for a home loan. Your combined income and credit scores can help you qualify for a bigger mortgage which can pay for a bigger house in a better neighborhood. Who doesn’t find that scenario appealing? You’ve always wanted a sunroom, a guest bedroom, or space for a home office. Bigger is better, isn’t it?

As co-signers, you and your spouse or partner equally share the legal commitment to make the loan payment every month. Two incomes feel safer than one.

Why One Mortgage Signer Is Safer than Two Co-Signers

Practically speaking, being co-signers on a mortgage loan doesn’t produce the benefits you may be expecting. In fact, there is a serious financial downside to being a co-signer. Each of you is 100% responsible for the full mortgage loan should something prevent the other co-signer from helping with the mortgage payments.

…if you can just tie up one person’s income and credit for a home loan instead of both of you, you’ll have far more buying power as a couple.

If your spouse/partner can qualify alone for the mortgage, don’t become a co-signer. If you can qualify alone for the mortgage, don’t let your spouse/partner become a co-signer.

Why tie up both of your credit-and-debt-to-income ratios with one home loan? This answer is very important! Because if you can just tie up one person’s income and credit instead, you will have far more buying power as a couple.

Here’s how it works:

If your spouse/partner is the sole signer on the home loan, your own credit-and-debt-to-income ratio is not affected. You still have the buying power to qualify for a car loan or another type of loan should it become necessary in the future. That’s buying power you wouldn’t have if you had co-signed the mortgage loan.

Buying a house may easily be the biggest financial commitment you’ll ever make. Be sure it’s a smart financial decision, too.

A and N Mortgage Services Inc, a mortgage broker in Chicago, IL provides you with high-quality home loan programs tailored to fit your unique situation with some of the most competitive rates in the nation. Whether you are a first-time homebuyer, relocating to a new job, or buying an investment property, our expert team will help you use your new mortgage as a smart financial tool.

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