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Separated Spouse and Mortgage Co-signing

by Karen

Should I Co-sign?

Should I Co-sign?

If a parent co-signs a mortgage for his daughter and then becomes responsible for paying that mortgage, is the parent's spouse also liable for the mortgage payments? In this situation the parent and his spouse have not lived together for several years. They are not legally separated, but file their tax returns as Married filing separate.

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Who Pays The Mortgage If There is a Co-Signer?
by: Jeffrey

Hi Karen,

I see you're from my home state of Michigan. I've been living in Florida for almost 4 years now. Got tired of the winters.

Thanks for visiting my website and asking your questions.

In the case of parents who are "non-occupant co-borrowers" on a mortgage, if for some reason the daughter stops paying on the mortgage, the lender can come after both parents if they are still married.

Even though they are not living together, both will still be held responsible if even if only one of them signed the mortgage. Most states, Michigan included have dowry rights. So one mate cannot sell a house without the consent of the other. It also works in the favor of the lender this way.

Now I'm not a lawyer and I'm only making an educated guess, but I'm pretty sure all parties to this transaction can be held accountable by the lender.

The only real way out of this situation is to sell or refinance the home and get the parents (non-occupant co-borrowers) off the mortgage.

I hope this helps.



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Co-Signing a Mortgage for My Son

by J. Turner
(Mountain Grove MO )

I own my own home and have 15 rental properties. If I should cosign for my son and if I should die would my own properties be held up in probate or would it just be the home I cosigned on if he defaulted?

They have a good income but his wife has a credit score under 620 do to medical bills a few years ago.


Hello Mr. Turner,

Thank you kindly for coming by my site and asking your questions.

If you were to die, the home loan you co-signed for with your son would default to him alone. I can only answer that from the mortgage side of the equation. Since he is a co-borrower along with you, then he would still be held responsible for the mortgage.

As far as probate goes, I'm really not in the position to answer questions of a legal nature. You would need to seek advice of a legal professional to get the answers to that question.

I just know that whoever signs on the mortgage is held responsible if they default. Even if you were not alive, I do not think the lender could attach your estate to collect on that mortgage.

They use the house as collateral and would foreclose on it if the loan were to go into default.

I hope this helps. I understand your position, you want to help your children and want to protect your assets at the same time. I'm just not sure how that all works.

Kind Regards,

Jeff Ragan

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First Time Home Buyer Programs/Loans

by Vic

My Fiancee and I are planning to start looking for a home within the next year. Her parents want to buy another home to rent but want her to apply for the loan to take advantage of any first time home buyer loans and then take the house off her name.

I don't know the exact details but my question is, if she does this will that affect us when we want to buy a home? and how? thank you in advance!


Hi Vic,

Sorry for any delay on my part.

I see your concern here. If I understand your question right, your future in-laws want your fiancee to buy the house in her name. If this means that she will be the one who qualifies to get the mortgage and they will be making the payments, this very likely will not work anyway.

To get the house in her name, she has to meet the lenders guidelines for income, credit worthiness and proper documentation to qualify for the home loan.

If her parents are looking to take advantage of any first time home buyer loan programs, I just cannot see how this would work.

Perhaps they are planning to go on the mortgage to help her get a house by becoming a non-occupied co-borrower, I'm thinking that this may be what is in their minds. You would have to find a loan program that allows this.

Maybe they want to get the house using the first time home buyer programs out there and then she will be quit claiming the deed to them. Again, this may not be that easy since today, all mortgages have a "due on sale" clause.

There are many details to this deal I would need to know before giving a definite answer.

If your fiancee is on a mortgage when you go to buy a house together, this would create a possible issue because now she has to qualify for 2 mortgages. So she would need the income to do so.

This is kind of a hard situation for me to answer, but I do know that the lenders these days are very critical when looking at possible borrowers. It's best to keep your self clean and free of any possible unusual deals that may hinder your chances for a future mortgage.

Honestly, unless your local government has some kind of a first time home buyer loan program that makes this worthwhile, this kind of arrangement might make things hard for you and her.

I wish you the best. Owning home is still a good investment for your future.



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First Time Home Buyer Loans
by: Irene

Great question!! I agree with your concerns. It appears like the parents are more interested in themselves and not you. It is so wonderful that you are checking things out before you make that decision!

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