What Does It Mean To Co-Sign On A Mortgage?
When you co-sign a mortgage, you promise to pay off the loan in the event the primary borrower is unable. A co-signer becomes necessary when the person applying for the mortgage doesn't have sufficient credit history, reliability or income to get the mortgage on his own.
Things to know about co-signing:
1. The co-signer is agreeing to be a backup up and make payments should the borrower fail to perform.
2. Missed or late payments will also affect the credit record of the co-signer and bring it down.
3. The co-signer may also be liable in any legal actions. His or her own property could be at risk in a lawsuit.
4. All amounts owed by the primary borrower will show as owed by the co- signer on their credit report, thus increasing his or her debt load. If planning to take out a loan yourself in the future, it will increase your apparent debt load and could potentially hurt your ability to be approved.
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