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Mortgage  Question?
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Should Parent Co-Sign Mortgage If They Are Not Working?

Should you have a parent co-sign on a mortgage if they are not working? I have a low credit score and my Dad has a high credit score but he is retired and not working so I am not sure if he would help me qualify for the mortgage.

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

Even though your Dad has a high credit score, adding him as a co-borrower when you apply for a mortgage may not be helpful for several reasons. First, when two people apply for a mortgage as co-borrowers, the lender typically uses the lower credit score between the two applicants. So even though your Dad has a high credit score, the lender will likely use your credit score to determine your ability to qualify for a mortgage. The lower your credit score, the higher the mortgage rate you pay. We provide a thorough overview of the credit score required for a mortgage and also cover other borrower mortgage qualification requirements on FREEandCLEAR.

Another reason why it may not be helpful to have your Dad as a co-borrower is because the lender also includes his income and debt to calculate your debt-to-income ratio, which determines what size mortgage you can afford. Because your Dad is not working, he does not contribute any income to offset his monthly debt expenses, such mortgage, credit card and car loan payments, so including him as a co-borrower may hurt your debt-to-income ratio and make it more challenging for you to qualify for a mortgage.

For the reasons outlined above, you may want to consider applying for a mortgage as a sole borrower and there are a couple of mortgage programs that you may be able to qualify for. First, the FHA Mortgage Program enables you to buy a home with a down payment as low as 3.5% and a credit score as low as 580 or potentially as low as 500 under certain circumstances. We provide a comprehensive overview of the FHA Mortgage Program on FREEandCLEAR and you can use our FHA Mortgage Qualification Calculator to determine what size FHA loan you can afford based on your monthly gross income, debt payments and mortgage rate.

My recommendation is that you contact multiple lenders to understand how they would handle your unique situation. You can review FHA lenders in your area by clicking FHA MORTGAGE RATES We advise you to contact at least four lenders as qualification guidelines vary. Plus, shopping lenders is the best way to save money on your mortgage.

In addition to the FHA Mortgage Program, you may also want to consider the NACA Mortgage Program. NACA is a not-for-profit organization that offers mortgage programs designed to make home ownership more attainable. The NACA Mortgage Program enables borrowers to purchase a home with no down payment and no closing costs and uses a character-based borrower credit review process instead focusing on your credit score. We provide a detailed overview of the NACA Mortgage Program on FREEandCLEAR and you can contact NACA by visiting the NACA web site.

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About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry

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