Co-Signor
Definition: A Co-Signor is an additional applicant on the mortgage who shares responsibility for the loan.
Liability: They are equally responsible for the mortgage payments. They are both on the mortgage and the property title.
Common Scenarios
- First-time homebuyers with limited income
- Borrowers with lower credit scores
- Self-employed individuals with variable income
Impact
- Since they are on title, their financial situation my be impacted when they apply for future credit.
Guarantor
Definition: A Guarantor supports the loan by promising to cover payments if the primary borrower defaults but is not on title.
Liability: They have a legal obligation to pay the mortgage if the borrower cannot, but they do not have ownership rights.
Common Scenarios
- High-income earners helping family members qualify
- Parents assisting children without affecting homeownership rights
- When lenders require additional financial backing but don’t want extra names on title
Impact
- A guarantor’s financial strength helps with mortgage approval, but their credit may still be affected if payments are missed.
Which Option is Right for You?
- A Co-Signor is best if shared ownership is intended
- A Guarantor is preferable if financial backing is needed without adding someone to the title
Please let us now if you require further help!
Mike Busby
THE COMMENTS CONTAINED HEREIN ARE A GENERAL DISCUSSION OF CERTAIN ISSUES INTENDED AS GENERAL INFORMATION ONLY AND SHOULD NOT BE RELIED UPON AS TAX OR LEGAL ADVICE. PLEASE OBTAIN INDEPENDENT PROFESSIONAL ADVICE, IN THE CONTEXT OF YOUR PARTICULAR CIRCUMSTANCES. THIS ARTICLE WAS WRITTEN, DESIGNED AND PRODUCED BY MIKE BUSBY FOR THE BENEFIT OF MIKE BUSBY WHO IS A FINANACIAL ADVISOR FOR BRANDON LINDSAY INSURANCE AGENCIES, A TRADE NAME REGISTERED WITH INVESTIA FINANCIAL SERVICES INC., AND DOES NOT NECESSARILY REFLECT THE OPINION OF INVESTIA. THE INFORMATION CONTAINED IN THIS ARTICLE COMES FROM SOURCES WE BELIEVE RELIABLE, BUT WE CANNOT GUARANTEE ITS ACCURACY OR RELIABILTY. THE OPINIONS EXPRESSED ARE BASED ON AN ANALYSIS AND INTERPRETATION DATING FROM THE DATE OF PUBLICATION AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. FURTHERMORE, THEY DO NOT CONSTITUTE AN OFFER OR SOLICITATION TO BUY OR SELL ANY SECURITIES. MUTUAL FUNDS OFFERED THROUGH INVESTIA FINANCIAL SERVICES INC.
