Should my mom co-sign for my mortgage loan?

Question

My fiancé and I want to buy our first house but she is on a leave and I’m unemployed due to Covid, we have a sizable savings account but no income at the moment. We need help getting approved for a fha loan or any loan with a low down payment.

My moms house is paid off and she has no other mortgages, also her credit is decent. Should I pay her to co-sign for us? I want to buy a undervalue property so I can refinance it into my own loan once we go back to work.

Please let me know if this is a good option or even possible

Jon Kelly · Answer

@Skylar Mcgee It's certainly possible and you should compensate your mom if she co-signs. I would be VERY conservative with all of your estimates in your analysis. If you have a sizable savings account, why are you putting such a low down payment down? Unless you find a "home-run" type deal, you may be better off waiting to buy until you or your wife have steady income again

CJ Chaney · Answer

It is a great option for young people. Just make sure you have the money saved or income coming in to afford it.

Chris John · Answer

"Should my mom co-sign for my mortgage loan?"

Only if she's willing and able to pay it if things go south.

Suzy Sevier · Answer

@Skylar Mcgee I would ask smaller banks what different options you may have with them.

Justin V. · Answer

@Skylar Mcgee

If you mom is open to helping you out, I’d take it if you are insanely certain you won’t screw things (the deal and her credit) up.

Sounds like a family Member helping you get a start.

Make sure you have a good budget and lots of reserves on this one due to the lack of income.

Twana Rasoul · Answer

I like that you are looking at all options to make it work, I would recommend at least one of you be employed with a decent job if you are going to get someone to cosign if you needed a little help. If things don't go well you don't want to also risk her credit standing.

best of luck!

Brian G. · Answer

@Skylar Mcgee imo it's not a good idea. If you need a co-signer the bank is saying you are not ready to buy a home. Why would you want to commit to a home purchase without an income? Even if it could work, it's not a good idea for you and your fiancé to be tied to your mom financially heading into a new marriage. This could create much bigger issues in your marriage than not being able to buy a house as soon as you would like. Be patient, focus on your income and wait until you are ready to buy.

Should my mom co-sign for my mortgage loan?

Should my mom co-sign for my mortgage loan?

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