WOULD A CO-SIGNER HELP YOU QUALIFY FOR A MORTGAGE?

Qualifying for a mortgage has become more challenging in recent years, especially with stricter income requirements and stress-test rules. For some buyers, adding a co-signer is the only way to meet lender guidelines and secure an approval.

See how a co-signer can strengthen an application — and what everyone must understand before signing. 👇

Adding a co-signer can help you qualify, but it also creates legal and financial obligations that all parties need to consider carefully.

1️⃣ Why You May Need a Co-Signer

Stricter regulations have reduced borrowing power for many buyers. 

✔️ income doesn’t meet lender requirements 

✔️ credit history is thin or damaged 

✔️ stress-test rules reduce buying power 

✔️ debt-to-income ratios are too high 

A co-signer adds their strength to your application, helping you qualify when you can’t on your own.

2️⃣ How the Stress Test Affects Approval

Both insured and uninsured mortgages must qualify at a higher rate. 

✔️ contract rate + 2% OR benchmark rate (whichever is higher) 

✔️ reduces affordability by 20% or more 

✔️ especially challenging for first-time buyers 

A co-signer can help overcome this gap by adding income or credit depth.

3️⃣ Two Ways to Co-Sign a Mortgage

There are two main structures lenders use. 

✔️ Co-borrower: added to the title and equally responsible 

✔️ Guarantor: not on title but fully responsible for repayment 

Most lenders prefer co-borrowers because it simplifies legal remedies if problems occur.

4️⃣ Responsibilities of a Co-Signer

Co-signers must meet the same qualification tests as the primary borrower. 

✔️ full income and credit review 

✔️ legal responsibility for all payments 

✔️ late payments affect their credit 

✔️ reduces their future borrowing power 

Co-signing is a serious commitment and must be considered carefully.

5️⃣ Risks of Being a Guarantor

Guarantors are on the mortgage but not on the title. 

✔️ responsible for the debt 

✔️ no ownership rights to the property 

✔️ limited control if problems arise 

This structure exposes the guarantor financially without giving them legal protection.

6️⃣ Removing a Co-Signer Later

Co-signing is not permanent — you can remove them once you qualify independently. 

✔️ requires lender approval 

✔️ legal process and small fees apply 

✔️ must meet qualification standards alone 

Removing a co-signer must be structured properly to avoid triggering penalties.

7️⃣ Alternatives to Using a Co-Signer

Sometimes a co-signer isn’t the only solution. 

✔️ gifted down payment 

✔️ paying off debts to improve ratios 

✔️ restructuring credit 

✔️ improving income documentation 

Exploring alternatives can reduce risk for everyone involved.

💬 Final Thought

A co-signer can make homeownership possible when income or credit alone isn’t enough — but it’s a major financial responsibility that affects both parties. Understanding the legal, credit, and long-term implications is essential before moving forward.

If you’d like us to review your situation and determine whether a co-signer or alternative strategy makes sense, send The Frontline Mortgage Group a message anytime.