Co-Signer Takaful Partnership Program (Co-Signer TPP)

  • Get higher financing approved with Co-signer(s) on your financing application 
  • Takaful is the Islamic alternative for Insurance. We pool funds from each homeowner to protect co-signers in case of default removing significantly risk associated with co-signing
  • A partnership agreement between co-signer and homeowner will be signed. On the standard agreement, the Co-signer becomes 1% owner in exchange for $100 and will also get a 1% increase in the home price. This will give a financial incentive for co-signers. Amounts can be modified between parties. 
Case Example:
  • Client Household income is $100,000 and they pre-qualify for $500,000 financing (usually 5X* income)
  • Client wishes to buy an $800,000 property and has 10% downpayment of $80,000
  • Client needs a co-signer to be approved for an additional $220,000 to buy the $800,000 property
  • Client finds a co-signer or Zero sources a co-signer for them (Minimum Income of $44,000 needed 5X*)
  • Client and co-signer sign Cosigner TPP agreement ( $100 payment, 1% future exit payment, and putting $2000 in a lawyers trust account to be used for a Takaful Pool in case of default by any clients of Co-Signer TPP)
  • Client's Lawyer on the home acquisition date sets the shares for the house based upon payments of both parties (99% for Client and 1% for Co-signer)  
  • After 2 years if the client income increases or the outstanding amount decreases the co-signer can go off the title of the house. If the home price increases to $950,000 then the co-signer will receive $1500 from the Client (1% of the $150,000 increase of the property). The client receives a partial refund for his $2000 he put in the Takaful Pool. 
Advantages
  • Clients whose household incomes are low can now with additional co-signers acquire a property
  • Co-signers who have been reluctant due to risk associated with co-signing can now have a Takaful Pool of funds held in a lawyers trust account in case of default
  • Co-signers have financial incentives to be co-signers. Terms can be modified between parties. Options such as if a co-signer wants to give $30,000 to build the basement and live in the house. Other options can be explored where the terms of the Partnership can be modified with the help of a lawyer.
  • Our Muslim community in Canada is large and we encourage our Ummah to have co-signers across Canada register and help other fellow Muslim Canadians to acquire a home. We recommend clients to invite potential co-signers of family and friends to our webinar.
*Note "5X" is if the client has good credit and no debt. The actual amount of pre-qualification the registered mortgage can provide after you submit documents