When you’re applying for any kind of loan, there are many requirements you have to fulfill before you can get approved – even when you come to us for a low documentation loan. There are many ways to organise yourself and put your best foot forward in the application, and one such way is to get someone to co-sign onto your mortgage.
Can anyone co-sign on my loan?
Yes, provided they have good credit. A cosigner is someone trusted individual who will share the responsibility of the loan. It has to be someone in good stead with lenders, as they see the cosigner as someone who will be able to cover costs if you cannot. Common examples are parents signing on to their son or daughter’s loan first home loan, or a couple signing a loan together when one partner has bad credit.
Do I still need to provide all my details if someone else is cosigning?
Yes, you will both need to act as if you’re applying for a full loan yourselves. The credit scores of both applicants are assessed, and the cosigner’s positive credit rating will help improve the outcome of the process.
Could relationships be hurt by a bad cosign?
There is always the risk of a strained relationship – by cosigning a loan, someone has shown a significant degree of trust in the borrower, and it is up to them to stay on top of repayments. Careful financial planning is key to a successful borrowing period. By staying on top of your payments and rewarding the faith put in by a co-signer, you can avoid any awkward situations.
Cosigning a loan requires a great degree of trust, and you need to be prepared. You can speak to a broker to organise a financial plan for the long term, and then talk to your cosigner with a clear vision of your repayments to make a great start to your borrowing plan.
