What Are the Benefits of Having a Cosigner on a Mortgage?

A cosigner will help you qualify for a mortgage loan.

A cosigner will help you qualify for a mortgage loan.

Your parents may have cosigned the loan for your first car, and cosigning a mortgage works pretty much the same way. A cosigner agrees to share in the responsibility of the loan – for better or for worse. If you’re dead set on becoming a homeowner but can’t get the approval you need, consider the benefits of having a cosigner on your mortgage.

Credit Score Considerations

Your credit score has a significant impact on the interest rate that you'll qualify for when you get a mortgage. The higher your credit score, the lower your interest rate. If your score is low because of excessive debt or late payments, you may want to consider waiting until you have a better handle on your finances before taking on the responsibility of a mortgage. On the other hand, if your credit score is less than stellar but you don't carry excessive debt, a cosigner with a higher score may enable you to qualify for a loan with a lower interest rate.

Employment Requirements

Obtaining a mortgage loan requires proof of a steady and reliable source of income, which may be hard to do if you’re self-employed, have been dealing with periods of unemployment or just started your dream job within the last year. A cosigner with a steady job and evidence of consistent income will help you fulfill the employment requirement went obtaining a mortgage.

Loan Amount

When it comes to getting approved for a mortgage loan, the saying “two heads are better than one” rings true. Two incomes are always better than one, and dual paychecks can make all the difference in how much you will get approved for on your loan. Of course, you should make sure that you can afford the payment on your own if the cosigner is involved only to help you qualify for the loan.


Before agreeing to allow someone to cosign for your mortgage loan, make sure that person will actually improve your chances of qualifying for a loan. Some people might not be aware of their own poor credit scores or debts, and they can wind up hindering your chances of approval even further. No matter how well you know your cosigner, contracts are essential to protect all parties involved. If your best friend puts his credit on the line to help you become a homeowner, his reputation can be seriously affected if you make late payments or wind up foreclosing for any reason. A contract should be drawn up to outline each person’s responsibility regarding payments and potential default on the loan.


About the Author

Based in South Florida, Leann Harms has been writing since 2008. Her design, technology, business and entertainment articles have appeared in "Design Trade" magazine and Web sites including eHow. Harms has a Bachelor of Arts in English from Florida Atlantic University.

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