Should You Buy a House by Yourself or Have a Cosigner

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You’re more likely to qualify for a mortgage if someone cosigns with you. But is that a good idea? Let’s look at this in a few different ways. 

A Mortgage Cosigner Helps You Qualify

When someone cosigns a mortgage with you, they’re saying they are willing to make the payments even if you can’t. It isn’t just a temporary thing – it’s for the entire duration of the loan.

To the lender, that is a good sign. It means someone will be available to help you make the payments. Two incomes are better than one, and the lender will feel more confident that they’ll get the monthly payment regularly. 

This is important if you are in a situation where it’s difficult to qualify with your financials alone. Maybe you were out of work for a while and racked up credit card debt just to pay the bills. Or maybe you make a lot of money but have high debts because of student loan payments so your debt-to-income ratio isn’t great. 

Because the lender has more faith in getting that payment, you’re more likely to qualify for a mortgage. In fact, you can probably qualify for a more expensive mortgage than if you didn’t have a cosigner. Two incomes = a higher amount you can qualify for. 

Cosigning Can Impact Your Relationship with Someone

Having someone cosign your mortgage might affect your relationship with them.

On the one hand, it can be something that helps the two of you grow closer together. They’re showing you trust and helping you do something important, so you might be very thankful and go out of your way to help them in the future. Or even if you don’t try to help them, maybe you just find more time to be with them. 

On the flip side, it could lead to a negative impact on your relationship. They might not like that you asked them in the first place but didn’t want to disappoint you by saying No. Or even if they were initially happy to do it, they later realized it will affect their credit score, making it harder for them to qualify for a big purchase, they had wanted soon. 

And then there’s the worst-case scenario where you aren’t able to make the payments and they have to do it for you. While they may not mind doing it once or twice, it can get frustrating to them and hurt your relationship if it becomes a trend. 

Cosigning with a Partner

Having a partner cosign with you is different than a family member or friend. 

If you’re married, it makes sense to have your partner sign with you. You’re in it together and have committed to that for the long haul. 

If you are dating someone, it’s not so simple. You may not plan on breaking up any time soon, but who knows what the future holds. If you buy the house with them, they co-own it and things will get messy if you split up. If you bought the house on your own, they don’t own it and even if things don’t work out, at least you don’t need to worry about dealing with the housing issue. 

Conclusion

Should you buy a house by yourself or have a cosigner? That’s up to you – there are pros and cons to both. Give us a call at (844) 765-6844 and we’ll help you evaluate your options. 

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