Becoming a Guarantor or Co-signer

Thinking about becoming a co-signer or guarantor to help someone get a house?  Here are some points to consider:

Guarantor

Co-signer

–     Does not have their name on the property title

–     Completes the mortgage application as well as the primary applicant

–     Personally guarantees that payments will be made if the original applicant defaults

–     Can be used if the primary applicant qualifies with their income, but may have credit problems

–     Lenders may offer early release policies that allow the guarantor to remove their name if the original applicant can qualify on their own for the mortgage. 

 

–          Become a co-owner of the property as their name will be on the property title

–          Completes the mortgage application as well as the primary applicant

–          Is accountable for missed mortgage payments, though it is understood that they are not the going to make payments. 

–          Helps the primary applicant if they do not qualify income wise

–          Need to see a lawyer to remove their name from the property title.  Original applicant must be able to qualify on their own for the mortgage

When deciding to become a guarantor or a co-signer it is important to realize, that in either case, it may be a lengthy time commitment and should feel confident in the person they are assisting.

If you have any questions about this or any other mortgage details, please contact us. It’s important to have all the proper information before committing to a mortgage.