Dealing with Co-signing a loan: Should you sign it or not?

Some people think that being a cosigner in a loan only means that they prove that the person trying to get a loan is trustworthy, some easily agree to be a consigner without being aware of the legal responsibilities that they will have to face when the person they have co-signed for stop paying or starts paying late. To ensure that you know everything there is to know about cosigning, read through below:

What Does it Mean to Co-Sign a Loan? - When you co-sign a loan, you promise to pay off the loan in the event the primary borrower is unable to pay off the loan. A co-signer becomes necessary when the person applying for the loan doesn’t have sufficient credit history, reliability or income to get the loan on his own.

Important things to know when considering a cosigner - A wide range of individuals can be a cosigner as long as they are creditworthy, understand and accept the responsibilities of being a cosigner, and meet any specific cosigner requirements of the lender.

The basics of co-signing a loan - Lenders generally take a cautious approach to first-time borrowers. Without a credit history to go on, it's not unusual for them to require a co-signer before they hand over a check. A borrower who's been told he needs a co-signer isn't necessarily considered a poor credit risk.

The Difference Between a Co-borrower and a Co-signer - Having a co-borrower or co-signer may improve the FHA loan applicant’s chances of getting approved for the mortgage. Using a co-borrower or co-signer is also a way for a borrower with established credit to help a less established co-borrower become a home owner under the proper circumstances.

The Benefits and Issues of Co-Signing a Loan - Co-signing on a loan or credit card is a serious matter that should not be entered into lightly. Essentially, when you co-sign on a loan, you are taking on legal responsibility for the account, and it will appear as your obligation on your credit report.

What Will Happen If the Cosigner of Your Loan Files Bankruptcy? - The prospect of building your credit with a cosigned car, home or personal loan is exciting. Your first big loan is a major milestone on your road to financial adulthood and can make or break your reputation in the eyes of future lenders.

Cosigning for step son's mortgage turns into bad deal

 Bob in Sacramento, CA cosigned on his step son's mortgage and now his step son is making late payments. After the call Dave explains why not everyone in America needs a mortgage.

There is nothing wrong with co-signing, the problem only occurs when the person you have agreed to cosign for has stopped paying for the loan or gets late in their payment. Besides the nuisance they can give you, the legal implications can be a headache.