Co-Signer

What is a Co-Signer?

A co-signer is a person who agrees to take equal responsibility for a mortgage loan if the primary borrower fails to meet payment obligations.

Why a Co-Signer Matters in Real Estate

In Canadian real estate, co-signers are commonly used when the primary applicant doesn’t meet income or credit requirements. The co-signer’s financial information is included in the mortgage application, increasing the overall qualifying power.

• Co-signers are legally liable for missed payments
• Their credit may be impacted by the loan
• The mortgage appears on both parties’ credit reports

Often a parent or close relative, a co-signer doesn’t usually hold ownership interest in the property unless formally added to the title.

Understanding the role and risks of a co-signer helps both parties make informed financial and legal decisions.

Example of a Co-Signer in Action

A parent co-signs a mortgage for their child who has limited credit history. They are jointly responsible for the loan but are not on the property title.

Key Takeaways

• Shares legal responsibility for the mortgage.
• Helps buyers qualify with stronger financials.
• Credit and liability affect both parties.
• Does not automatically own part of the home.
• Should understand full risk exposure.

Related Terms

• Mortgage Qualification
• Credit Score
• Debt Service Ratios
• Guarantor
• Mortgage Application