Co-Signing A Mortgage: Everything You Need To Know

Getting on the housing ladder is getting more difficult for many young people. As a result, many people turn to their parents for help and ask them to co-sign on a mortgage.

As a parent, it is your instinct to help your child in whatever way you can. Co-signing on a mortgage could be rewarding to help them take advantage of historically low interest rates and set them up for a financially secure future. If they’re currently one of the 52% of millennials still living in the family home, co-signing on a mortgage might be your best shot at becoming an empty nester.

However, as with any financial decision, there are downsides and considerations to bear in mind. The future is more uncertain for young people starting their careers than ever, so you need to consider your child’s ability to earn enough to meet their monthly payments consistently.

If your child has been refused a mortgage on their own, you may want to investigate why carefully. It might be that the bank knows something about your child’s finances that they are reluctant to tell you themselves.

You should think carefully before agreeing to co-sign on a mortgage for your child. If they default on the loan, the financial stress could cause your relationship to suffer.