Whether you are cosigning for a mortgage, for an auto loan or a credit card, this is what you need to know:
- If you co-sign, the lender considers you to be a joint borrower, and you become equally responsible for repaying any balances owing on the loan. If one borrower doesn’t pay the debt, the bank or lender can demand that any borrower listed in the loan or credit agreement pay the entire amount.
Note: For certain credit cards, the terms may state that authorized users (secondary cardholders) can be held responsible for any outstanding balances, even if they don’t sign the credit card application.
Be sure to read the credit agreement carefully and make sure that you fully understand who is responsible. If you aren’t sure, ask the lender.
- When co-signing for a loan, credit card or line of credit from a federally regulated financial institution, all of the borrowers have the right to receive the same information from the lender about the loan.
This information has been provided by the Financial Consumer Agency of Canada. For more information regarding mortgages and cosigning, contact your Bob Hanscom Mortgage Agency Advisor today or visit FCAC's website at:
http://www.fcac-acfc.gc.ca/eng/resources/publications/mortgageLoan/TSJointBorrow-eng.asp
