Before You Co-Sign a Mortgage

Shawn Dreger • October 3, 2023

So you’re thinking about co-signing on a mortgage? Great, let’s talk about what that looks like. Although it’s nice to be in a position to help someone qualify for a mortgage, it’s not a decision that you should make lightly. Co-signing a mortgage could have a significant impact on your financial future. Here are some things to consider.


You’re fully responsible for the mortgage.


Regardless if you’re the principal borrower, co-borrower, or co-signor, if your name is on the mortgage, you are 100% responsible for the debt of the mortgage. Although the term co-signor makes it sound like you’re somehow removed from the actual mortgage, you have all the same legal obligations as everyone else on the mortgage. When you co-sign for a mortgage, you guarantee that the mortgage payments will be made, even if you aren’t the one making them.


So, if the primary applicant cannot make the payments for whatever reason, you’ll be expected to make them on their behalf. If payments aren’t made, and the mortgage goes into default, the lender will take legal action. This could negatively impact your credit score. So it’s an excellent idea to make sure you trust the primary applicant or have a way to monitor that payments are, in fact, being made so that you don’t end up in a bad financial situation.

 

You’re on the mortgage until they can qualify to remove you.


Once the initial mortgage term has been completed, you won’t be automatically removed from the mortgage. The primary applicant will have to make a new application in their own name and qualify for the mortgage on their own merit. If they don’t qualify, you’ll be kept on the mortgage for the next term.


So before co-signing, it’s a good idea to discuss how long you can expect your name will be on the mortgage. Having a clear and open conversation with the primary applicant and your independent mortgage professional will help outline expectations.


Co-signing a mortgage impacts your debt service ratio.


When you co-sign for a mortgage, all of the debt of the co-signed mortgage is counted in your debt service ratios. This means that if you’re looking to qualify for another mortgage in the future, you’ll have to include the payments of the co-signed mortgage in those calculations, even though you aren’t the one making the payments directly.


As this could significantly impact the amount you could borrow in the future, before you co-sign a mortgage, you’ll want to assess your financial future and decide if co-signing makes sense.


Co-signing a mortgage means helping someone get ahead.


While there are certainly things to consider when agreeing to co-sign on a mortgage application, chances are, by being a co-signor, you'll be helping someone you care for get ahead in life. The key to co-signing well is to outline expectations and over-communicate through the mortgage process.


If you have any questions about co-signing on a mortgage or about the mortgage application process in general, please connect anytime. It would be a pleasure to work with you.

Shawn Dreger
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Smart Steps to Get Your Home Market-Ready

By Shawn Dreger • October 28, 2025
Thinking About Selling Your Home? Start With These 3 Key Questions Selling your home is a major move—emotionally, financially, and logistically. Whether you're upsizing, downsizing, relocating, or just ready for a change, there are a few essential questions you should have answers to before you list that "For Sale" sign. 1. How Will I Get My Home Sale-Ready? Before your property hits the market, you’ll want to make sure it puts its best foot forward. That starts with understanding its current market value—and ends with a plan to maximize its appeal. A real estate professional can walk you through what similar homes in your area have sold for and help tailor a prep plan that aligns with current market conditions. Here are some things you might want to consider: Decluttering and removing personal items Minor touch-ups or repairs Fresh paint inside (and maybe outside too) Updated lighting or fixtures Professional staging Landscaping or exterior cleanup High-quality photos and possibly a virtual tour These aren’t must-dos, but smart investments here can often translate to a higher sale price and faster sale. 2. What Will It Actually Cost to Sell? It’s easy to look at the selling price and subtract your mortgage balance—but the real math is more nuanced. Here's a breakdown of the typical costs involved in selling a home: Real estate agent commissions (plus GST/HST) Legal fees Mortgage discharge fees (and possibly a penalty) Utility and property tax adjustments Moving expenses and/or storage costs That mortgage penalty can be especially tricky—it can sometimes be thousands of dollars, depending on your lender and how much time is left in your term. Not sure what it might cost you? I can help you estimate it. 3. What’s My Plan After the Sale? Knowing your next step is just as important as selling your current home. If you're buying again, don’t assume you’ll automatically qualify for a new mortgage just because you’ve had one before. Lending rules change, and so might your financial situation. Before you sell, talk to a mortgage professional to find out what you’re pre-approved for and what options are available. If you're planning to rent or relocate temporarily, think about timelines, storage, and transition costs. Clarity and preparation go a long way. The best way to reduce stress and make confident decisions is to work with professionals you trust—and ask all the questions you need. If you’re thinking about selling and want help mapping out your next steps, I’d be happy to chat anytime. Let’s make a smart plan, together.

Deciphering the Latest Housing Affordability Initiatives in Canada

By Shawn Dreger • October 14, 2025
In recent years, housing affordability has become a significant concern for many Canadians, particularly for first-time homebuyers facing soaring prices and strict mortgage qualification criteria. To address these challenges, the Canadian government has introduced several housing affordability measures. In this blog post, we'll examine these measures and their potential implications for homebuyers. Increased Home Buyer's Plan (HBP) Withdrawal Limit Effective April 16, the Home Buyer's Plan (HBP) withdrawal limit will be raised from $35,000 to $60,000. The HBP allows first-time homebuyers to withdraw funds from their Registered Retirement Savings Plan (RRSP) to use towards a down payment on a home. By increasing the withdrawal limit, the government aims to provide young Canadians with more flexibility in saving for their down payments, recognizing the growing challenges of entering the housing market. Extended Repayment Period for HBP Withdrawals In addition to increasing the withdrawal limit, the government has extended the repayment period for HBP withdrawals. Individuals who made withdrawals between January 1, 2022, and December 31, 2025, will now have five years instead of two to begin repayment. This extension provides borrowers with more time to manage their finances and repay the withdrawn amounts, alleviating some of the immediate financial pressures associated with using RRSP funds for a down payment. 30-Year Mortgage Amortizations for Newly Built Homes Starting August 1, 2024, first-time homebuyers purchasing newly built homes will be eligible for 30-year mortgage amortizations. This change extends the maximum mortgage repayment period from 25 years to 30 years, resulting in lower monthly mortgage payments. By offering longer amortization periods, the government aims to increase affordability and assist homebuyers in managing their housing expenses more effectively. Changes to the Canadian Mortgage Charter The government has also introduced changes to the Canadian Mortgage Charter to provide relief to homeowners facing financial challenges. These changes include early mortgage renewal notifications and permanent amortization relief for eligible homeowners. By implementing these measures, the government seeks to support homeowners in maintaining affordable mortgage payments and mitigating the risk of default during times of financial hardship. The recent housing affordability measures announced by the Canadian government are aimed at addressing the challenges faced by homebuyers in today's market. These measures include increasing withdrawal limits, extending repayment periods, and offering longer mortgage amortizations. The goal is to make homeownership more accessible and affordable for Canadians across the country. As these measures come into effect, it's crucial for homebuyers to stay informed about the changes and their implications. Consulting with a mortgage professional can help individuals explore their options and make informed decisions about their housing finances. If you're interested in learning more about these changes and how they may affect you, please don't hesitate to connect with us. We're here to walk you through the process and help you consider all your options and find the one that makes the most sense for you.