Your son asks if you’ll be a co-signer so he and his wife can qualify for a mortgage. Or a friend who’s struggling financially wants to know if you’ll co-sign a car loan. If anyone asks you to co-sign a loan, it’s not a decision to take lightly. You would be obligated to make any payments your
family member or friend misses. In fact, you would be legally responsible for the entire loan amount.
MAKING YOUR DECISION
The trust factor is key. Say the primary borrower is responsible, has a reliable income, and only needs a co-signer because their credit history is insufficient. You might feel confident to co-sign. However, if the borrower is known to be reckless with money, you may wish you hadn’t been asked.
You may also find it helpful to imagine your reaction if your family member or friend can’t make one or more payments. Would you be understanding of their situation or feel resentful?
Another concern is if word of your favour gets out. What if other relatives or friends now want you to co-sign, or ask for an outright loan?
SAYING YES OR NO
When you feel confident in your family member’s or friend’s ability to honour the loan, co-signing can make a positive difference in their life and be gratifying to you. If you decide against co-signing, you may wish to explain that it’s nothing personal. You’re aware that financial issues sometimes lead to damaged relationships, and that’s not a risk you want to take with them or anyone.
This material was prepared for and published on behalf of your financial advisor and is intended only for clients resident in the jurisdiction(s) where their representative is registered.
This material is provided solely for informational and educational purposes and is not to be construed as an offer or solicitation for the sale or purchase of any securities or as providing
individual investment, tax or legal advice. Consult your professional advisor(s) prior to acting on the basis of this material. Insurance products are available through advisors registered with
applicable insurance regulators. Individual equities are available only through representatives of Assante Capital Management Ltd. In considering any particular investment, please remember
that past performance is no guarantee of future performance. Although this material has been compiled from sources believed to be reliable, we cannot guarantee its accuracy or completeness.
All opinions expressed and data provided herein are subject to change without notice. Neither CI Assante Wealth Management or its dealer subsidiaries Assante Capital Management Ltd. and
Assante Financial Management Ltd., nor their affiliates or their respective officers, directors, employees or advisors are responsible in any way for any damages or losses of any kind whatsoever
in respect of the use of this material. CI Assante Wealth Management is a registered business name of Assante Wealth Management (Canada) Ltd. Assante Capital Management Ltd. is a member of
the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Assante Financial Management Ltd. is a member of the Mutual Fund Dealers Association
of Canada and the MFDA Investor Protection Corporation (excluding Quebec). © 2022 CI Assante Wealth Management. All rights reserved.