Cosigning a mortgage

[happyhoix]

We co-signed a car loan for DS. He was in college but working a well paying internship, we knew he had the funds to pay it back, and we had the money to pay it off if something unexpected happened and he couldn't. It was fine, he paid it all off and it gave him a good credit rating.

I wouldn't co-sign for anyone other than DS, though. There was a woman here at work who approached several people to co-sign a personal loan so she could have the money to get married. (Fortunately not me, but she approached a co-worker.) She owed a lot of CC debt and couldn't get a personal loan from a bank. Co-worker turned her down and was glad she did because shortly after she got married this woman moves 1500 miles away when her new DH relocated. I have a feeling my co-worker wouldn't have seen a single payment on that personal loan....

[agilemom]

My brother (and SIL) asked my mom to cosign on their mortgage a few years ago. He was out of work, yet still buying a house. My sister and I both had to have long conversations with Mom on why this was a bad idea. She kept saying " but he'd never screw me over- I know he's responsible" etc.

I finally said to her that I understood that she trusted my brother, as did I (I knew he wouldn't intentionaly screw her, but crap happens) but did she trust SIL if something happened to him. She said no, and finally realized it was a bad idea.

[Rocky Mtn Saver]

Aug 21, 2012 11:41:47 GMT -5 happyhoix said:

I wouldn't co-sign for anyone other than DS, though. There was a woman here at work who approached several people to co-sign a personal loan so she could have the money to get married.

I can't ever imagine doing that, or receiving such a request!! What nerve!

[Rocky Mtn Saver]

Aug 21, 2012 11:44:07 GMT -5 agilemom said:

My brother (and SIL) asked my mom to cosign on their mortgage a few years ago. He was out of work, yet still buying a house. My sister and I both had to have long conversations with Mom on why this was a bad idea. She kept saying " but he'd never screw me over- I know he's responsible" etc.
I finally said to her that I understood that she trusted my brother, as did I (I knew he wouldn't intentionaly screw her, but crap happens)

I can see how this happens all the time with co-signing. I trust my siblings, parents, and BFF's not to intentionally screw me over, too. But no one can predict the future, and what can happen is that they UNintentionally can't pay or whatever. Like you said, crap happens, and the co-signer has to accept the possibility that it can happen despite the best efforts of their trusted friend/family. Never co-sign for something you cannot comfortably make the payments on by yourself.

[Plain Old Petunia]

I didn't even realize it was possible to cosign a mortgage. I thought the title and mortgage had to match; you must be on both, not one or the other.

[WeWillBackGowron]

...:::"When would it ever be a good idea to co-sign for anything?":::...

When the primary borrower lives up to his/her obligations and pays in full as agreed. I've been cosigned for, and been a cosigner with no problems both times. But yes, "happy endings" are a rarity in YM cosign stories.

[973beachbum]

I doubt I would ever cosign a mortgage or even a car loan even for my kids although they are the only ones I would even consider doing it for. If it was a car I would consider loaning them the money or buying it in my own name first.

As far as the whole cosigning things goes why can't the cosigner just be the second person on the mortgage? At least that way they will know immediately if there is a problem and they need to start making payment before it hits the fan. Plus they would have the ability to instigate the sale of the asset instead of finding out months later that it hasn't been paid but not have any control over the situation other than making the payments themselves.

Which if I had to make the payments for a house I couldn't ever live in or sell it would make me furious!

[minnesotapaintlady]

As far as the whole cosigning things goes why can't the cosigner just be the second person on the mortgage?

um...they are. That's the point!

[973beachbum]

Aug 21, 2012 12:11:21 GMT -5 minnesotapaintlady said:

As far as the whole cosigning things goes why can't the cosigner just be the second person on the mortgage?

um...they are. That's the point!

Maybe I am misunderstanding but cosigners in my experience arent on the deed to the house or car. They are just the extra person the bank can go after if the loan goes south. They can't sell the property etc.

I was thinking as if my son wants us to cosign a house with him then we all buy the house together and our name/s goes on both the deed and mortgage just like any other loan for a couple that buys a house.

[minnesotapaintlady]

Maybe I am misunderstanding but cosigners in my experience arent on the deed to the house or car

That's right, but you said you thought cosigners should be on the mortgage, which they are.

I agree. If anyone ever managed to sucker me into cosigning (I don't see that happening though) I would insist on being a co-owner of the property/vehicle whatever, as well.

[Swamp]

Aug 21, 2012 12:03:43 GMT -5 WeWillBackGowron said:

...:::"When would it ever be a good idea to co-sign for anything?":::...

When the primary borrower lives up to his/her obligations and pays in full as agreed. I've been cosigned for, and been a cosigner with no problems both times. But yes, "happy endings" are a rarity in YM cosign stories.

because there is no story in the happy ending. there's nothing to talk about.

[Rocky Mtn Saver]

Aug 21, 2012 12:30:09 GMT -5 minnesotapaintlady said:

Maybe I am misunderstanding but cosigners in my experience arent on the deed to the house or car

That's right, but you said you thought cosigners should be on the mortgage, which they are.

I agree. If anyone ever managed to sucker me into cosigning (I don't see that happening though) I would insist on being a co-owner of the property/vehicle whatever, as well.

I really liked the idea I've heard a few times for the co-signer to the be the one actually making the payments to the bank. The borrower gives you the payment money each month, but you control the making of the payments. That way you know it's being paid and you don't get blind-sided by a notice AFTER things have already gone pear-shaped.

[Peace77]

Some people have stated that they would be willing to co-sign for a child, sibling or other close relative that they trust. The problem is not just whether you can trust the person or not.
The problem is that you can't predict whether the person that you are willing to co-sign for will ever lose their job, become injured or ill and unable to work. Worst case of all, the person dies and doesn't have enough life insurance to cover the debt.

A recent story in the news was about a young woman who was killed in a car accident and the parents were still on the hook for her private student loans.

If you can't easily make every single payment on a debt, don't co-sign for it.

[MidJD]

I really liked the idea I've heard a few times for the co-signer to the be the one actually making the payments to the bank. The borrower gives you the payment money each month, but you control the making of the payments. That way you know it's being paid and you don't get blind-sided by a notice AFTER things have already gone pear-shaped.

That's what ILs did. They love SIL but are not quite too blind to see that she is not the most responsible person when it comes to money. So they took some cash out of their HELOC and bought her a $4K car, rather than cosign - she gives them $100 every Friday, they have enough cash in the bank to pay off the full amount if necessary, the bank gets its 3% interest, everyone's happy.

I don't have kids but honestly can't think of a single person for whom I'd cosign. And it's not that any of my friends/family have evil intentions, but you just never know what can happen.

[minnesotapaintlady]

I don't have kids but honestly can't think of a single person for whom I'd cosign. And it's not that any of my friends/family have evil intentions, but you just never know what can happen.

Even if they pay responsibly, it completely changes the relationship when a loan is involved and makes things "weird" sometimes. That's why I think more people are open to cosign for a child when they never would for anyone else. Cosigning kind of puts one on a different level than the other (borrower is slave to the lender and all that), but the parent-child relationship is already skewed that way.

[georgiagal]

Cosigning a small loan (first car, student loan, etc.) for a child or grandchild is one thing. Many have said they have done it. I have done it for DD student loans, for a relatively small amount so that she could get better interest. I fully expect her to pay it off (starting this month!). I would have prefered to have given her the money for college, but was not able to. If any of my children needed me to cosign for a small amount for vehicle or other startup money when living on their own, I will do it.

However, cosigning a mortgage for a "friend" is a whole different story.

[happyhoix]

Aug 21, 2012 13:32:48 GMT -5 minnesotapaintlady said:

I don't have kids but honestly can't think of a single person for whom I'd cosign. And it's not that any of my friends/family have evil intentions, but you just never know what can happen.

Even if they pay responsibly, it completely changes the relationship when a loan is involved and makes things "weird" sometimes. That's why I think more people are open to cosign for a child when they never would for anyone else. Cosigning kind of puts one on a different level than the other (borrower is slave to the lender and all that), but the parent-child relationship is already skewed that way.

Helps the kid get a credit rating, too.

[Rocky Mtn Saver]

Aug 21, 2012 13:32:48 GMT -5 minnesotapaintlady said:

I don't have kids but honestly can't think of a single person for whom I'd cosign. And it's not that any of my friends/family have evil intentions, but you just never know what can happen.

Even if they pay responsibly, it completely changes the relationship when a loan is involved and makes things "weird" sometimes.

This is definitely something to consider when deciding about loaning/borrowing money or co-signing or any number of other financial transactions between friends/family!

[ontrack]

My dad cosigned a private student loan for my brother for law school and is really regretting it. He's retired now but has to pay on the loan because my brother can't (still hasn't gotten a law job, graduated from 3rd tier law school and had to take the bar exam 6 times before he passed). Plus, Sallie Mae keeps applying my dad's payment to another of my brother's delinquent loans, and saying my dad is behind. Grrrrr.

[athena53]

When DS bought his first house, I offered to cosign. I'd started him out with a credit card right out of HS, so he had some credit rating, and managed to get a loan on good terms on his own, through a special program for first-time buyers.

This was a LCOL area where we could have afforded to pay the mortgage if he didn't, and DS has a good job and is very responsible. I'm still glad we didn't have to cosign, and would not do it for anyone else.

[Rocky Mtn Saver]

Aug 21, 2012 16:12:44 GMT -5 athena53 said:

When DS bought his first house, I offered to cosign. I'd started him out with a credit card right out of HS, so he had some credit rating, and managed to get a loan on good terms on his own, through a special program for first-time buyers.

This was a LCOL area where we could have afforded to pay the mortgage if he didn't, and DS has a good job and is very responsible. I'm still glad we didn't have to cosign, and would not do it for anyone else.

Yeah, same story for me. My mom offered to cosign for my first vehicle and then a small house I bought in my 20's. Fortunately, I didn't need a co-signer for either one. I had started my credit with a couple of small CC's after leaving high school, so I always got credit on my own.

[mollyanna58]

Aug 21, 2012 12:30:09 GMT -5 minnesotapaintlady said:

Maybe I am misunderstanding but cosigners in my experience arent on the deed to the house or car

That's right, but you said you thought cosigners should be on the mortgage, which they are.

I agree. If anyone ever managed to sucker me into cosigning (I don't see that happening though) I would insist on being a co-owner of the property/vehicle whatever, as well.

When I co-signed my sister's mortgage, I did require that I be included on the deed. However, when they sold the house at a profit, I had to file a tax return in their state and declare 50% of the profit, even though I put no cash into the deal and didn't get any cash out. (Sister and BIL did reimburse me for the tax.)

If you co-own a car, you have to be a named insured on the car insurance policy.

[quince]

A little different because I'm on the deed as well as the mortgage, but I went in on a house with DH before we were engaged, because he couldn't get the loan on his own- not because of "bad" credit- because of NO credit- because he had always previously paid for everything in cash- he hadn't ever borrowed money for anything. He had plenty of cash reserves, just not quite the purchase price.