question about co signing a loan with somoene who has better credit...

This is not for me as we are no where near buyng a house yet but my friend was asking and i said i will ask the girls on the boards im sure ill get a ton of feedback.

Let say a couple wnts to buy a house. the husband has great credit the wife has fair credit rating. the guys mom is willing to co sign on a loan for them sicne she has RIDICULOUSLY good credit.

1) What are the steps to gettign a mortgae like this?

2) What does it actually mean that she is cosigning? who relalyown teh house?

3) Would the excellent credit lower the intrest rate they will get or just raise the amount of teh oan they willbe approved for.

TIA

Re: question about co signing a loan with somoene who has better credit...

anyone?

Re: question about co signing a loan with somoene who has better credit...

I will double check with my husband when he wakes up from his nap

but I THINK the person with the better credit is going to a to be the borrower and the the other person the co-borrower

Also- having good credit is not longer enough to get a loan

if the person with the great credit has a mortgage already and has other debts like a car payment, cc bills etc

then their debt to income ratio has to be able to support the other mortgage

example

Person X owns a house- the payment is $2K a month

he has a car payment $500 a month

and credit card bills- minium payments $500 a month

when you add all that up- it's $3K a month

let's say his income is $4K a month

he is at a 75% debt to income ration

now, let's say I ask him to co-sign my mortgage

he techincally only has $1K left a month

so it's not going to work regardless of his credit score

get what I am saying?

Re: question about co signing a loan with somoene who has better credit...

yes thank you. the mother only has a heloc for less than 100,000 out thats it

Re: question about co signing a loan with somoene who has better credit...

Co-Signing in general is just bad in general. I wouldn't do it.

If he is the breadwinner and has the better credit, you should qualify for a loan.

Re: question about co signing a loan with somoene who has better credit...

My husband has great credit and I have ok credit - high cc bills and not always on time payments for all my bills. We are both on our mortgage.

First, i'd have her get her own credit report to see her score and see what it is. It might be better than she thinks.

Then talk to the lender and see what it is like to have them both do it and to just have him do it. I think it helped that I do have a decently paying job, even though I have little in the bank, which goes w/his better job and more money in the bank and CDs and whatnot. But I have been at my job for many years, that def. helped too.

We got a loan for the amount we wanted at a very good rating (it's even going down). It helped that I had a history w/the lender.

I'd NEVER co-sign on a house with anyone who is not my husband. Way too risky.

Really... talk to the lender about it and have him/her do the numbers and have them advise your friends.