Date: April 12, 2023
Category: Blogs
With home prices and interest rates on the higher end over the last few years, many are looking at the option to add a co-signer to their mortgage application to help increase buying power.
If you are considering adding a co-signer to your mortgage or you are considering co-signing on someone’s mortgage, here is what you should know about your role and responsibilities as a co-signer
A mortgage co-signer agrees to take joint responsibility for a mortgage with the primary borrower.
The co-signers role is to provide additional security for the lender by promising to repay the mortgage loan if the primary borrower cannot do so.
The responsibilities of a mortgage co-signer include:
- Repayment of the mortgage: A co-signer is responsible for making mortgage payments if the primary borrower defaults or cannot make payments. The co-signer is equally liable for the mortgage as the primary borrower.
- Credit score impact: If the primary borrower misses payments or defaults on the mortgage, it will also negatively impact the co-signer’s credit score. This means that the co-signer’s ability to obtain credit in the future may be affected.
- Legal obligations: A co-signer is legally obligated to repay the entire mortgage loan, not just their share of it. If the primary borrower defaults, the lender can pursue the co-signer for the full amount of the loan.
- Financial obligations: A co-signer will also need to provide financial information to the lender, such as income and credit history, to help the lender assess the mortgage application.
It is important for a co-signer to understand the full extent of their responsibilities before agreeing to co-sign a mortgage. Co-signing a mortgage is a serious financial commitment that should not be taken lightly.
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To learn more connect with Ana Cruz 905.870.0513 or email at ana@askanacruz.ca
