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Cosigning for a mortgage in Ottawa is becoming more and more popular and there are may reasons why one needs a cosigner.
Cosigning For a Mortgage
Reasons a Cosigner May be Needed
A cosigner may be needed when an applicant:
- is self employed and doesn’t have a large average net income
- is not two years into their hourly, contract or business for self employment yet
- does not have at least two years of favourable credit
- has debt in collections
- has a probationary period at work
Who Can Cosign For a Mortgage?
A cosigner can be an immediate family member, such as a mother or father, brother or sister. Also, grandparents can assist.
Before cosigning for a mortgage, it is important to consider all the factors involved from personal to financial. Also, what happens when things go good and when things go bad.
Have an Exit Strategy
Having an exit strategy is always a good idea so that the cosigner and applicant know exactly when the cosigner will not be needed anymore.
A Mortgage Calculator
A mortgage calculator will help give the cosigner a rough idea of what the mortgage payment will be. That way you can see if you are comfortable with this payment if the applicant cannot fulfil their payment responsibilities.
If the applicant is not able to make the mortgage payment, the cosigner will be responsible so it will be good to know if you can afford to make the payments if the applicant cannot.
Learn more: Mortgage Payment Calculator
Your Credit Report
The debt you are cosigning for will show up on your credit report. This will affect your ability to borrow in the future so if you have any major purchases coming up and it will be important to take that into consideration when cosigning.
A Wonderful Way to Help
If everything comes together properly, cosigning for a mortgage can be a wonderful way to help a family member get started with home ownership or get a fresh start after a life challenge.
Learn more: Cosigning for a Mortgage on YouTube