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Arizona Mortgage Question of the Day: Can I qualify for an Arizona mortgage if I have co-signed on a loan for another person?

Arizona Mortgage Question of the Day:  Can I qualify for an Arizona mortgage if I have co-signed on a loan for another person?

Well, kind of. 

There is a NEW Arizona mortgage underwriting rule for this.  IF you are qualifying for an Arizona mortgage and you have co-signed (for example for your son to buy a car) BOTH you and your son need to be on the NOTE to repay.   Your son makes the payments on time each month (out of his OWN individual account) then he can provide cancelled checks to show HE makes the car payment.  By doing so, you can qualify for your Arizona mortgage without having that payment included in your debt.

IF, instead, you initiate the loan FOR HIM, you are on the ONLY borrower on the NOTE, then you have to qualify for your new Arizona mortgage WITH the car payment regardless of who makes the payment. 

It always angered me that my father would never co-sign on my behalf, to establish credit.  After what I have seen on individuals mortgage credit reports, I now understand his concern.  Although we all know, I would have made all of my payments diligently 🙂 …… the alternative possibilities are scary.

I would always discourage anyone from co-signing on behalf of another person, however, in certain circumstances it can not be avoided.  IF this is the case- just ensure you are BOTH on the NOTE.

Having a dream is good, owning one is better!

Leslie Nilsen

Owner/ Broker

First Class Financial Services

602.294.9288 (p)