Jim
Weiker, writer for The Columbus Dispatch, warns against the danger of
co-signing a mortgage. The co-signer assumes all the risks of the loan but
receives none of the benefits. The lender is just as responsible, and this can
amount to taking on a second mortgage. A co-signer is responsible for making a
payment if the other person defaults. Ask yourself if you can afford that—as
many as 3/5 co-signers end up paying the loan as reported by the Federal Trade Commission.
Even
worse, some theorize that co-signers are pursued when lenders face delinquent
funds. A lender could sue you, especially if you have better credit than the
other signee. Thus, it could limit the co-signer’s ability to borrow money him/herself.
Finally,
co-signing for a friend or family member could put a strain on your
relationship. Would you judge they way someone spent that money that you
co-signed for? If you want to financially help someone you care about, consider
giving money towards the down payment (up to $13,000/year without paying a gift
tax, or $26,000 filing jointly).
So
before you co-sign a mortgage, think twice before you agree. Read the full article here.
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