Just recently we had a client referred to us; his financial picture was one of "perfect health” - he had a great credit report that was clean, his income was great, and overall, he was ready to buy a home. This, in our minds, this should be an easy deal to close… unfortunately that deal never even had a chance.
The straw that broke the camel’s back was that he was a co-signor on two different vehicle loans. That doesn’t make him a bad person here; in fact, that speaks volumes to his generosity and willingness to help those that he can… an admirable character trait; but, as a co-signor, he entrusted his personal credit history to the primary borrower. Which means that any late payments will hurt both parties involved. You see, one of the borrowers was not able to remove him from their loan because in less than a year the friend’s financial situation never improved. In fact, he went as far as signing for a consumer proposal, without even talking to his co-signor first!
The reason I share this story is because I want to make the public aware that co-signing isn’t just a matter of your signature on someone’s loan… it is so much more than that and before you agree to being a co-signor it is absolutely important to understand what you are getting into.
Perhaps you are not looking to be a co-signor but rather are looking for someone to help you out with your next loan - may I kindly remind you that it is a rare privilege to find someone who is willing to co-sign for you. Make sure you are deserving of their trust and support.
Canadian Mortgage Trends, a preeminent mortgage information resource for Mortgage Professionals, recently put out a must-read article on the benefits and risks of co-signing for a mortgage. I strongly encourage you to take a couple minutes to read this article which provides some great insights and considerations for both parties involved.
Read now by clicking on the link below: