Co-Signers & Guarantors: What They Do (and Don’t Do) for Your Mortgage
When it comes to getting a mortgage, sometimes your own income, credit, or debt ratios aren’t quite enough to qualify.
That’s where a co-signer or guarantor can step in to help. But while many people use the terms interchangeably, they actually play very different roles!
It’s important to know exactly what each one does (and doesn’t do) for your mortgage.
What a Co-Signer Does
A co-signer becomes a joint borrower on your mortgage.
Their income and credit are added to yours, helping you qualify for a larger loan or better terms.
They’re equally responsible for making payments if you can’t.
Their name appears on both the mortgage and the property title.
Co-signers are often parents helping their adult children enter the market. It’s a powerful tool, but it also comes with shared responsibility — if you default, the co-signer’s credit takes a hit too.
What a Guarantor Does
A guarantor supports your mortgage by promising to step in if you default, but without being on the title of the property.
Their income and credit help you qualify, just like a co-signer.
They aren’t listed as an owner of the home.
They take on legal responsibility for the loan if you don’t make payments.
Guarantors are less common but can be useful in cases where additional income support is needed, but the other party doesn’t want to be on the title. Guarantors are generally reserved only for spouses (and sometimes parents), but lenders typically want non-related co-signers to be on title.
The Key Differences
Title Ownership: Co-signer is on the title, guarantor is not.
Responsibility: Both are legally responsible for repayment, but a guarantor’s involvement is triggered only if you default.
Use Cases: The Co-signer route is much more common, guarantors are generally only used for spouses, and only in specific circumstances. Independent legal advice is always required in the case of a guarantor.
Things to Consider Before Asking Someone
It’s a big commitment! Your co-signer or guarantor’s financial health is directly tied to your mortgage.
They need to understand the risks before agreeing.
Professional advice is crucial to set the right expectations for everyone involved.
Guarantors left off title, especially spouses, need to consult a lawyer for independent legal advice for estate planning and understanding future implications of this set up.
The Bottom Line
Having a co-signer or guarantor can open doors to homeownership, but it’s not a decision to make lightly. It requires trust, clarity, and the right strategy to ensure everyone feels protected.
At Jewels Ferris Mortgages, we’ll help you explore whether a co-signer or guarantor is the right fit and guide you through the process with care, transparency, and support. Give us a call when you are ready to chat!
