![]() ![]() When you co-sign for a loan you are 100 per cent responsible for the funds if the person you co-signed for can't pay them back. Some people who apply for loans or mortgages are rejected because they don't have the income or credit history to be approved and that’s when they may come calling on a family member or friend to co-sign their loan, but if you do it's a very serious financial undertaking.Ĭredit Canada said it’s already noticed more clients seeking help after co-signing loans for friends and family members. Get the latest local updates right to your inbox.Download our app to get local alerts to your device.In 2018, Credit Canada said, banks rejected 20 per cent of mortgage applications and it expects those figures to become even higher with rising interest rates. "You really want to be sure that an individual that you’re co-signing for can cover those payments, because you're going to be on the hook for them if they are unable to,” said Gursh Singh, client experience manager with Credit Canada. It’s putting more pressure on some borrowers who are rejected for loans to seek the help of a co-signer so they can be approved. After years of historic low interest rates the Bank of Canada has been steadily raising rates with another hike possible on Oct.
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June 2023
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