For some people, it may seem like getting a mortgage is essentially impossible. But, I’m here to tell you that isn’t always the case! Whether you’re a student, transitioning to a new job or you just don’t fit the bank’s guidelines, getting a mortgage may still be in the cards for you. You’ll just need a little help from your family in the form of a cosigner.
There can be many reasons why you need a cosigner on a mortgage and with the way banks are getting tougher with approvals, it’s becoming a lot more common to see. In this blog post, I’ll go through who qualifies to be a mortgage cosigner in Canada and what the banks will ask for from them.
Let’s get started!
Who qualifies as a cosigner?
Normally, only direct family members are allowed to cosign on a mortgage. This means it can be your mother, father, grandfather, grandmother, brother, sister and sometimes they will allow an uncle or aunt.
Banks may also accept a stepparent and godparents as well. This can be an exception, but banks are becoming less emotional and have very strict guidelines. They will want to ensure these cosigners fit into those guidelines. This choice of a cosigner isn’t a sure 100% and depends on the right story, circumstance and bank.
What does being a cosigner mean?
When someone cosigns a mortgage, the cosigner is agreeing to be a backup and make payments if you, the borrower, fail to be able to. If you don’t make on-time payments or miss payments altogether, the credit record of the cosigner is affected and will go down. Finally, all amounts owed by the borrower will show as owing by the cosigner as well, increasing the cosigner’s debt load.
What will lenders ask for from your cosigner?
When someone becomes a cosigner, the lender will ask for debt and income verification. Debt verification includes any credit cards, lines of credit, loans or mortgage debt. For income, the lender will want verification on whether they’re self-employed, an employee, fully commissioned, etc.
Whatever the cosigner has for income, the lender will verify that income with a requested list of documents.
The aim of the game is for the cosigner to help you qualify for your mortgage. So, if they have a high debt ratio that doesn’t help you qualify, they will not be the right cosigner for you.
Reach out to me today.
The best thing to do today is reach out to me! We can go over your personal situation and discuss getting a mortgage with a cosigner. If you need someone to cosign a mortgage, we can discuss who the best possible option is for you and begin conversations with that family member to ensure they’re willing to cosign.
There is always a bit of a process when qualifying for a mortgage, so the more time we have to work through your situation, the better. Simply fill out the form below and I’ll be in touch with you soon. Or, you can call me right away at 250-826-3111.
We’ll speak soon!