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How to Omit Co-Signed Debts from Your Mortgage Application
Dated: April 13 2025
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How to Omit Co-Signed Debts from Your Mortgage Application
Learn how to legally omit co-signed student loans or car payments from your debt-to-income ratio when applying for a mortgage or refinancing your home. Tips from mortgage expert Jeff Schneller.
Co-Signing Loans? Here’s What You Need to Know Before Applying for a Mortgage
When it comes to buying a second home or refinancing your current one, your debt-to-income ratio (DTI) plays a huge role in your mortgage approval. But what if your credit report shows debts that you don’t actually pay?
This is a common situation for parents who co-sign for their kids' college loans or car payments. According to mortgage expert Jeff Schneller of Corby Mortgage, you can omit these debts from your application—but only if you follow specific rules.
Can You Remove Co-Signed Debt From Your Mortgage Application?
Yes, you can! But here's what you need:
Proof that someone else (like your child) has made the payments consistently for at least 12 months.
Documentation like:
12 months of canceled checks, or
12 months of bank statements clearly showing the other party made the payments.
Avoid This Common Mistake: If the payments are coming from a joint account that includes your name, or if you occasionally deposit money into that account, the bank may still consider it your debt.
How to Set It Up the Right Way
If you’ve co-signed or taken out a loan for someone else (like a student loan or auto loan), Jeff recommends the following:
Have the borrower (your child or relative) create a separate bank account in their name only.
Make sure all payments come solely from that account for at least 12 months.
Do not transfer funds into that account—keep financial ties separate.
Why This Matters for Homebuyers
Whether you're buying a second home, refinancing, or investing in real estate, your DTI impacts how much you can borrow. By properly documenting who is actually paying certain debts, you can potentially:
Qualify for a larger loan
Secure better interest rates
Improve your overall mortgage application
Final Thoughts
Navigating mortgage rules can be tricky—especially when co-signed debt is involved. If you’re unsure how your credit profile affects your buying power, reach out to a trusted mortgage professional like Jeff Schneller at Corby Mortgage.
Know someone dealing with this situation? Share this post or tag them—it could save them thousands on their next mortgage!
Alex Mabry
I am passionate about real estate! Growing up we moved around a lot, with a family of 7 my parents would find a diamond in the rough to transform into our family home, my allowance was earned helping ....
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REALTORS® Association of Northeast Wisconsin All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s), nor Berkshire Hathaway HomeServices Fox Cities Realty - Berkshire Hathaway Home Services, nor RANWMLS shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. The data relating to real estate for sale on this website comes in part from the Internet Data Exchange program of the Multiple Listing Service. Real estate listings held by brokerage firms other than Berkshire Hathaway HomeServices Fox Cities Realty - Berkshire Hathaway Home Services may be marked with the Internet Data Exchange logo and detailed information about those properties will include the name of the listing broker(s) when required by the MLS. Copyright ©2026 REALTORS Association of Northeast WI MLS, Inc. All rights reserved. Last Updated: September 21, 2026 11:41 PM UTC
REALTORS® Wisconsin Real Estate Exchange (WIREX). All information deemed reliable but not guaranteed. Information is supplied by seller and other third parties and has not been verified. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s), nor Berkshire Hathaway HomeServices Fox Cities Realty - Berkshire Hathaway Home Services, nor WIREX MLS shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. The data relating to real estate for sale on this website comes in part from the Internet Data Exchange program of the Multiple Listing Service. Real estate listings held by brokerage firms other than Berkshire Hathaway HomeServices Fox Cities Realty - Berkshire Hathaway Home Services may be marked with the Internet Data Exchange logo and detailed information about those properties will include the name of the listing broker(s) when required by the MLS. Copyright ©2026 Wisconsin Real Estate Exchange (WIREX) MLS, Inc. All rights reserved. Last Updated: September 21, 2026 11:37 PM UTC
