Short answer
A straw buyer allows their identity, credit or title to be used for a purchase that is controlled or funded by someone else whose role is hidden. The person signing can become legally responsible for the mortgage, taxes and losses even if they were promised they would never make a payment.
The client problem behind the question
A friend offers cash for using your name because your credit is stronger and says the property will be transferred away after closing.
What the official guidance establishes
FINTRAC describes straw buyers and concealed ownership as risk indicators in real-estate schemes. Lenders require truthful disclosure of beneficial ownership, occupancy, funds and repayment arrangements.
Where the answer can change
Buying jointly or helping family is not automatically improper when every party and agreement is disclosed and approved. The danger is hiding the true owner, source, occupancy or repayment plan.
A practical Ontario example
Illustration only: A student signs for an investment property controlled by another person. Rent stops, the mortgage defaults and the student discovers the debt and tax issues are attached to their name.
What to do before committing
Do not sign an application, purchase agreement, mortgage or trust arrangement you do not understand. Obtain independent legal advice and disclose every beneficial owner, contributor and side agreement.
Questions Rajiv would ask
- What deadline, condition or closing problem must be solved?
- Which facts are confirmed by original documents and which are still assumptions?
- Which law, insurer rule or lender policy applies to this exact transaction?
- What happens to the cash requirement and monthly payment if the first option fails?
- What is the practical route back to lower-cost financing, if temporary financing is used?
Rajiv’s broker perspective
A difficult mortgage can be solved only with accurate information. I would rather explain a real income gap, credit issue or closing shortfall to the right lender than submit a polished story that the documents do not support. The legitimate options may include another A policy, alternative/B lending, an MIC or private bridge, a larger down payment, a delayed closing or a lower purchase price.
Related: Mortgage declined? Start here · Mortgage Knowledge Centre · Real Estate Centre · Updates & Rules Centre
Would a second opinion help before you commit?
Send Rajiv the property, deadline, financing concern and the documents already available. He can identify the missing questions, compare practical mortgage routes and explain the next step in plain language.