A great question that often times is asked, is who and why you utilize a co-signer The co-signer is another individual acting as co-borrower to offset the primary borrowers needs. So for you, you are self employed and rightfully so, take all the deductions you can on tax returns. I am limited to evidence your income, only by what is filed to the IRS… the income that you show limits your purchasing power, so one way to get your purchasing power up, is to include a co-signer. This persons income will assist in allowing you more strength and room to purchase a property within the allowable DTI (debt to income) ratio mandated by Fannie Mae for loans. The co-signer will provide all of the same documentation you will for the loan, to be analyzed by underwriting. The co-signer does not need to be a legal owner of the property- on title and deed to the property, BUT the co-signer is obligated and required to be on the Note; which is the legal, financial obligation to the property. So essentially they are responsible for financially repaying the loan (if you do not).
What is the Responsibility of a Co-Signer and When is One Needed?
