Cosigning For a Mortgage

[hockeyfan]

What is the name of your state (only U.S. law)? Michigan

Our granddaughter has asked us to cosign a remortgage on her house. The remortgage is due to her divorce and it will remove her ex's name from the existing mortgage and title.

Her mortgage person sent us a form to sign that lists our house's address as the Subject Property Address (not our granddaughter's house address) and has my wife and I shown as holding title to the property and as the borrower and co-borrower respectively. It also says the purpose of the loan is Purchase and the property will be the Primay Residence. Again, this seems to be directed at our house and not our granddaugher's house since her name and address are nowhere on this form (Fannie Mae Form 1003 07/05).

I asked the morgtage lady about this and she said we should just mark up any corrections, initial them, sign the forms and return them to her for processing.

Seems to me that our granddaughter's name and address should be on the form, not ours, and that these corrections should be typed in and overwritten and initialed.

What is the correct way to fill out this form?What is the name of your state (only U.S. law)?

[justalayman]

seems to me you are correct. Way too many errors to simply "mark it up" and return it.

The other possibility is that the banker believes you are mortgaging your home and intend on paying off the g-daughters home with the proceeds.


I think I would be doing some more talking with the loan officer.

[HomeGuru]

Yes, I agree.

[hockeyfan]

I'll talk to her tomorrow. Thanks for the input.

[nextwife]

I'd suggest you really think long and hard before becoming a co-BORROWER (your responsibility for the loan is greater than you may realize) for grand daughter. If she can't afford the house on her own, how do you think she will be able to meet the payment responsibility? Maybe she needs to downsize a bit to a home that IS affordable for her?

I work in default real estate, and I've seen a LOT of co borrowers shocked when they see the loan go bad and themselves responsible. I've seen many co borrowers stuck when their kid or grandkid up and leaves the house to go live with a new significant other somewhere. Don't take co borrowing lightly and don't let them cross collateralize YOUR home. Oh yeah. if you aren't on title, don't agree to be on the loan.

[hockeyfan]

Here's the latest. The mortgage lady made most of the changes I requested and just now finally sent the corrected paperwork (her email was down). The only change she did not make is to the borrower/co-borrower. She still lists myself as the borrower and my wife as the co-borrower. However, she says in her email "that only married couples can be placed on a application together. On the documents that will get signed at closing will show Jennifer as the borrower and you and your husband as the co-borrowers."

Still doesn't seem correct to me having differing information on two different documents.

Are there any other co-signer forms that could or should be used? The form being sent to us for signature is Fannie Mae Form 1003 07/05 and is titled Uniform Residential Loan Application.

The property being refinanced is appraised higher than the remortgage amount so I am not worried.

Thanks for any help.

[FlyingRon]

I don't see how you can have all the required TILA and other disclosure documents with differing names on them than those that will actually be subject to the mortgage. People other than husband and wife get listed on applications all the time. I don't know what she's screwing with, but I suspect it will BITE you if you continue to deal with this slime (I guess there are some good brokers out there but MANY are slime). Do you not have a good relationship with a bank that you've been dealing with over time that you can get a loan from directly?

[HomeGuru]

Originally Posted by hockeyfan

Here's the latest. The mortgage lady made most of the changes I requested and just now finally sent the corrected paperwork (her email was down). The only change she did not make is to the borrower/co-borrower. She still lists myself as the borrower and my wife as the co-borrower. However, she says in her email "that only married couples can be placed on a application together. On the documents that will get signed at closing will show Jennifer as the borrower and you and your husband as the co-borrowers."

Still doesn't seem correct to me having differing information on two different documents.

Are there any other co-signer forms that could or should be used? The form being sent to us for signature is Fannie Mae Form 1003 07/05 and is titled Uniform Residential Loan Application.

The property being refinanced is appraised higher than the remortgage amount so I am not worried.

Thanks for any help.

**A: on a 1003, there would be 2 separate loan applications with different information because of the different borrower info.

[hockeyfan]

Had a meeting today with the loan officer. Found out that because my wife and I do not reside at the property being remortgaged and is too close to our existing house to be considered a second home, then this remortgage is considered to be investment property to us and therefore will be about 1% higher than the 4.75% rate that was quoted to our granddaughter. They never explained this to her when she filled out the paperwork for the remortgage.

They put my wife and I on this form as borrower and co-borrower because there was no way to enter two names as co-borrowers. This form would be added to the original form (same 1003 form) that had been filled out and signed by our granddaughter prior to us being asked to be co-signers.

It was explained to us that to preserve the 4.75% rate we should take out a home equity loan, buy our granddaughers house and then sell it back to her on a land contract. This way she can still deduct the payment interest. We declare the interest as income and then deduct the equity loan interest to offset the interest income from the land contract.

Whew.... and all we wanted to do was guarantee that our granddaughter will be able to pay her mortgage.