Lender Requiring my dad be on title for mortgage

New to Real Estate · Vancouver, British Columbia · Member since 2022 · 157 posts · 86 votes

I graduated college a bit over a year ago. My credit score is 800+. But my credit lines aren't enough for this lender. So they are requiring I get my dad to co-sign and since its an investment he has to be on title as well.

Im in Canada the property is in the US. The terms this lender is offering are substantially better than other lenders. I have to buy in my personal name as well with this lender.

What kind of risk does this expose my dad to?

My worry is if something happens is my dads primary residence at risk ?

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Chris SeveneyBusiness Member

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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

@Gurjot Grewal

Not familiar with Canadian laws but if similar to US

Yes if your father is on the loan his personal residence is at risk if you cannot make the payments. If this is an investment property I would not put your dads primary residence at risk

Here is how:

You default and property is sold for $100k less than owed. You are responsible for delta and any assets could be used to secure the judgment.

Check with an attorney on this

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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
3y
Is your income also a problem for this lender (ie is it enough to qualify for the loan on your own)?
If you pay the mortgage in full each month, the only down side is if your dad needs to borrow money. Some of the mortgage debt will count towards his debt. If you live in the same area, you can also use one lawyer/notary to sign the paperwork to cut down on costs.
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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
@Gurjot Grewal
Not familiar with Canadian laws but if similar to US
Yes if your father is on the loan his personal residence is at risk if you cannot make the payments. If this is an investment property I would not put your dads primary residence at risk
Here is how:
You default and property is sold for $100k less than owed. You are responsible for delta and any assets could be used to secure the judgment.
Check with an attorney on this
7e investments53 Reviews
Website View Page
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Gurjot Grewal
OP
New to Real Estate · Vancouver, British Columbia · Member since 2022 · 157 posts · 86 votes
3y
Quote from @Theresa Harris:

Is your income also a problem for this lender (ie is it enough to qualify for the loan on your own)?
If you pay the mortgage in full each month, the only down side is if your dad needs to borrow money. Some of the mortgage debt will count towards his debt. If you live in the same area, you can also use one lawyer/notary to sign the paperwork to cut down on costs.

Income is not an issue. I have enough for the down payment, with plenty in reserves. My monthly income is also pretty good.

The mortgage wont be a problem. I just dont want my dads home to be at risk. As long as payments are made, is that something I would need to worry about? @Theresa Harris
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Gurjot Grewal
OP
New to Real Estate · Vancouver, British Columbia · Member since 2022 · 157 posts · 86 votes
3y
Quote from @Chris Seveney:

@Gurjot Grewal
Not familiar with Canadian laws but if similar to US
Yes if your father is on the loan his personal residence is at risk if you cannot make the payments. If this is an investment property I would not put your dads primary residence at risk
Here is how:
You default and property is sold for $100k less than owed. You are responsible for delta and any assets could be used to secure the judgment.
Check with an attorney on this

Would defaulting/not making payments be the only scenario where it would put his property at risk? Is it common for landlords to get sued in the US? @Chris Seveney
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Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Putting your dad on title would give him the same liability you have when selling the home. It will affect his credit and DTI, his primary residence won't be held as collateral so it won't be at risk.
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