Co-Signing A Mortgage; What Is It And Should You Do It?

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Co-Signing A Mortgage What Is It And Should You
Do It?
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• Whether youre affected by a poor cashflow,
  temporary unemployment or a lack of credit
  history, affording your own home may be next to
  unachievable, without a little help, that is.
• More and more Canadians are turning to third
  parties to help them provide security for loans,
  and mortgages are no different. Helping to
  address the lenders concerns about the ability of
  the primary borrower to pay back the loan,
  co-signing is becoming increasingly popular, but
  do you know enough about it?

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• Below is more detailed information about
  co-signing that should help you decide whether
  you seek help from a third party when applying
  for a loan, or indeed, whether you should become
  a co-signer.
• What is co-signing a mortgage?
• As the third party, you promise to pay the
  monthly mortgage payments if the primary borrower
  isnt able to taking on partial responsibility
  for that mortgage. Because co-signing is such a
  big responsibility, it typically only occurs
  among close family members.

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• Who might need a co-signer?
• Low wage growth and strict lending criteria have
  made it difficult for many potential buyers to
  afford, or be accepted for, a mortgage, and
  anyone facing these issues might benefit from a
  co-signer.
• Should you be a co-signer?
• No matter how well you might know the person that
  youre co-signing for, there are always risks
  associated with this process, and being
  responsible for a mortgage if the borrower
  defaults, is a weighty commitment.

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• Ultimately, the choice to be a co-signer is
  yours, but think very carefully before committing
  to it, and be certain that the borrower has a
  reasonable chance of being able to make their
  payments on time.
• Who can be a mortgage co-signer?
• Its important to remember that as a co-signer,
  your own finances will be under scrutiny, too,
  and the lender will look in detail at your
  income, debt and credit score. If you have a high
  debt load, little or no income and bad credit,
  the lender will doubtless refuse you as a
  co-signer.

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• Who make good co-signers of mortgages?
• Co-signers with a high net worth or plenty of
  home equity, might prove favorable in the
  lenders eyes, but ultimately, they simply want
  to be sure that you can make the loan payments,
  if the primary borrower cannot. To that end,
  evidence of a regular income and a good credit
  score are usually sufficient.
• While co-signing a mortgage can certainly be of
  benefit to an individual searching for a loan
  with which to purchase a new home, as a
  co-signer, youll need to give it careful
  consideration before committing to anything,
  since it requires complete confidence and trust
  in the primary borrower, whether theyre your
  sister, mother, brother or son!

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