Options For Adding Someone To Your Mortgage Application

Some homebuyers may need a little extra help during their application process, whether it’s because they need more funds to secure their down payment, or maybe even because their credit score is just not quite what the lenders are looking for. The good news is, there are solutions for that. Having a co-applicant, co-signer or a guarantor can help relieve some of the pressures that come with applying for a mortgage. Let’s dive into what these are, and how they can help! 

Co-Applicant:  This also known as a co-borrower. This is an individual that applies with the primary applicant, and is typically someone who is going to be purchasing the home with the applicant, a family member or a friend willing to help. This individual will be registered on title as well as the mortgage. The co-applicant’s income and debts will be included in all the mortgage calculations. They will be just as responsible for the mortgage as the applicant.  

Co-Signer: This is an individual who is added to the application in the same way as an applicant or a co-applicant, and will also be registered on title. The co-signer is there to help an applicant that does not qualify for a mortgage due to insufficient income. For that reason their income and debts will be included in the application. In a situation where the applicant misses payments or defaults, a co-signer is just as responsible for the mortgage as the applicant. 

Guarantor: This is an individual who is guaranteeing to the lender that if the applicant(s) don't meet their obligation regarding the loan, then the guarantor will meet the obligations. A guarantor is helpful when the applicant(s) have poor credit, or not enough income to qualify on their own. The guarantor will not be registered on title, and their income and debts will not be included in the mortgage calculations either (unless the guarantor lives in the same home as the applicant). However, the lender will still do a full application on the guarantor to ensure they can make the mortgage payments if the applicant(s) default. 

Here is a visual to help you know what the effects of adding someone to your mortgage  will be: 

If you find yourself questioning how you'll get approved for a mortgage, do not hesitate to reach out. Book a meeting with me today so I can answer all of your questions!