📅 Last Updated: April 4, 2023
✏️ Written By Caitlin Wood, BA

Do you need help getting approved for a new mortgage loan, or are you having difficulty leveraging your existing home equity for a loan? If you own another property or have friends or family that own property, then you should consider looking into a multiple collateral mortgage loan. The average consumer has no idea that they can utilize multiple collaterals to obtain a mortgage loan. However, it is a commonly used tool by private mortgage lenders.

How Do Multiple Collateral Mortgage Loans Work?

A multiple collateral mortgage works similarly to an average mortgage. You simply need to provide more than one form of collateral. Typically the two most common types of borrowers seeking this type of loan are:

  1. An individual who owns multiple properties
  2. An individual who has a friend or a family member who is willing to leverage their own property to help them obtain a mortgage loan

If a friend or family member put up their property to help you get approved, both of you will have to go through the same approval process to qualify for the loan (meaning that the lender will likely check both you and your cosigner’s credit history). Once the loan has been approved both parties become equally responsible for the loan, you are now co-borrowers.

Who Can Benefit From A Multiple Collateral Mortgage Loan?

Anyone can benefit from a multiple collateral mortgage loan, they are a great option for a variety of different borrowers, including but not limited to:

  • Credit constrained Canadians who may be cash poor but are equity rich
  • Those looking to get their first mortgage but have some financial issues that need to be ironed out 
  • Those who have been able to pay off large portions of their mortgages and want to use that to get the cash they need
  • People looking to get their finances back on track or pay down high-interest credit card debt
  • Those who need cash for home improvements or other large projects

The great thing about multiple collateral mortgage loans is that they are a highly customizable solution. You’ll work side by side with a private lender who is willing to see beyond any past financial mistakes and help you achieve your future financial goals. And while this type of mortgage loan is definitely valuable to those with limited credit, it can be beneficial to any type of borrower who is having trouble getting approved by a bank for a variety of different reasons. 

What Type Of Lenders Accept Multiple Collaterals?

Generally speaking, you’ll have more luck getting approved for a multiple collateral mortgage from a private lender than a traditional lender, such as a bank. Traditional lender requirements and restrictions are frequently more severe, although they do accept some cosigned or multiple collateral mortgage loans. Nevertheless, private lenders are more willing to work creatively with individuals to help them achieve their goals; they tend to look at the whole picture and understand the borrower’s position. They place less emphasis on the rigid set of criteria that banks are more dependent on.

Multiple Collateral Mortgage FAQs

Can a family member cosign my mortgage?

Yes. Some lenders will accept a cosigner if the cosigner is in good financial standing. However, if you’re cosigning a loan for a riskier borrower you may be asked to put up collateral as well.

Can a friend cosign my mortgage?

Yes. However, as we said before if your lender decides that you are a risky borrower your cosigner may be asked to put up collateral as well.

Can I ask a friend or family member to cosign, without providing any collateral?

Yes, but mortgages are approved on a case-by-case basis. It completely depends on your financial standing and the financial standing of your friend or family member. You’ll need to discuss this with your mortgage lender.

Bottom Line

A multiple collateral mortgage can help those with poor or limited credit gain access to the financing they need to buy a home. If a multiple collateral mortgage loan seems like it might be the solution you’ve been looking for, then submit a request. We’ll help connect you with a third-party licensed mortgage professional who can offer you the best terms for you. 

Note: Loans Canada does not arrange, underwrite or broker mortgages. We are a simple referral service.

Caitlin Wood Priyanka Correia Lisa Rennie Bryan Daly Cris Ravazzano Margaret Johnson Kale Havervold Liz Enriquez Sean Cooper Veronica Ott Corrina Murdoch Chrissy Kapralos

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