Fundamentally, guarantor and co-signer are both used to help qualify the mortgage for debt servicing or for credit score purpose.
Q. Who is on the title?
Answer: A guarantor can choose not to be on the title. He/she is used to qualify for the loan to strengthen the income, credit score, or both. There are only some lenders that will allow a guarantor, who can elect not to be on title or to be removed from title. Whereas a co-signer will be on the title. He/she is essential a formal co-applicant for the mortgage.
Q. What if the mortgage is in defult? Who is responsible?
Answer: Both guarantor or co-signer of the loan WILL BE 100% responsible for the mortgage if it is in default or in arrears. The lender will call upon all mortgagers on the file and all dividuals will be personally liable to repay the loan.
As this is a very popular question, email me if you need further clarification cchien@mortgagegrp.com
Filed under: FAQ
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