Buying a house is an extremely exciting experience, but it can also be stressful and disheartening to not get approved for a mortgage right away. Just because you didn’t get approved, doesn’t mean it’s impossible to eventually get approved for the mortgage you need to purchase your first home or your dream home. Particularly if you are trying to purchase a house on your own, it can make things a lot easier if you have a co-signer. While you will still be responsible for making the mortgage payments, a co-signer will only have to make payments if you don’t fulfill your commitments. However, there are a lot of things to consider before you buy a house especially if you’re considering someone to become a co-signer as it is no small ask.
Will having a co-signer help you get approved for a mortgage?
Not always, but if your mortgage application is looking a little weak (whether it be your credit, employment history, or income that is creating a bit of a barrier), a co-signer can help you fill in the void where you fall a bit short. Essentially when someone chooses to co-sign for you, it’s their way of showing the bank that they trust you 100% to make mortgage payments on time every month. This is a very big responsibility for someone to take on, and both you and the co-signer need to trust each other. You don’t want to ask just anyone to take on this role for you because if you do fall short on a payment that co-signer is then responsible for making payment on your behalf.
What are the risks?
Choosing a person to be your co-signer can be difficult because there are financial risks involved for them – so when finding the right person, be sure it is someone you can trust 100%. If for some reason you don’t make payments on time, both you and your co-signer will be impacted financially so keep that in mind. Also never make anyone feel pressured to become your co-signer. If they are not ready for the risks involved, they shouldn’t be your co-signer. In fact, as a rule of thumb, if they hesitate at all, it’s probably the wrong call.
To learn more about whether a co-signer is the right choice or if it’s even needed for you to get approved for a mortgage, give me, Darren Robinson, a call at (705) 315-0516. I have years of experience working as a professional mortgage broker here in Barrie and I have more options for you than you’d find at the bank. With my expertise, I can show you the steps you need to take in order to get approved for the mortgage you need!