WHAT YOU NEED TO KNOW ABOUT BEING A MORTGAGE CO-SIGNER

Co-signing a mortgage is a big commitment — and often misunderstood. Many people don’t realize that co-signing makes you equally responsible for the mortgage, not just “helping out.”

Here’s what you need to understand before, during, and after agreeing to co-sign 👇

1️⃣ Why someone may need a co-signer

Two major rule changes over the years have made qualifying harder, especially for first-time buyers or borrowers with less than 20% down.

✔️ tougher credit requirements

✔️ stricter income verification

✔️ the mortgage “stress test” (must qualify at a higher rate than the contract rate)

Because of this, borrowers may need a co-signer when:

- their income is too low

- their credit is weak or thin

- their job history is unstable

- they need more borrowing power to afford a home

Before agreeing, ask the hard questions — **why** do they need a co-signer and what is the clear exit plan to remove you later?

2️⃣ What the co-signing process looks like

Co-signing doesn’t mean “sign and forget.”

You become a full borrower on the application, so the lender will require the same documentation from you as the primary applicant:

✔️ letter of employment

✔️ recent paystubs

✔️ 2 years of tax documents (NOAs, T1s, and financial statements if self-employed)

✔️ mortgage statements for any properties you own

✔️ bank statements if contributing to the down payment

✔️ property tax bills

✔️ divorce/separation agreements if applicable

You will also have your credit pulled and must sign the final documents with the lawyer. You are fully tied to the mortgage until the lender approves a removal.

3️⃣ What risks you need to be aware of

Co-signing affects your financial profile as much as the main borrower’s.

✔️ It becomes a monthly liability on your credit report

✔️ It can reduce your borrowing power for your own mortgage or loans

✔️ Late payments will show on YOUR credit bureau

✔️ If the main borrower cannot pay, **you are 100% responsible**

Be prepared financially and make sure your budget can support covering payments if needed.

4️⃣ Important considerations before you agree

To protect yourself:

✔️ request annual mortgage + property tax statements

✔️ consider using a joint account for mortgage payments

✔️ set reminders to check that payments are being made on time

✔️ discuss life insurance — ensure the policy covers at least one year of mortgage and expenses

These steps help protect your credit and reduce financial risk should something unexpected happen.

💬 Final Thought

Co-signing can help someone you care about become a homeowner — but it also ties your credit, borrowing power, and financial liability to their mortgage. Make sure you fully understand the commitment, the risks, and the exit strategy before signing.

If you want help reviewing a co-signing situation or exploring alternatives, reach out and The Frontline Mortgage Group walk you through all the options.