Beware of Co-signing a Mortgage

Co-signing a mortgage is something that you might want to do in order to help you your children or a friend. This is something that is very nice and takes a lot of responsibility. This is why you need to make sure that you are not going to harm your finances just so you can help out a friend. The following are some of things that you need to beware of when you co-sign a mortgage. You are assuming responsibility, which is why you need to make sure that everything works out just like you want it to. Read through the following things so you can have a better idea of how to go about this situation.

You Take Over Control

When you co-sign a mortgage you are assuming a lot of responsibility. This means that if the person you are helping out does not pay their mortgage then you will have to pay for them. Also, you are putting your credit score on the line as well. If they mess up then it can also mess up your credit score. Now you can see why this is a tough decision. Money and credit score are two major things, so anytime they are on the line you really need to make sure that you are protected first. Some people only look at co-signing as a signature, but really it is much more then that. This is why it is a major responsibility.

Set Up a Plan with the Signer

You need to come to some sort of terms with the person that you are helping out. They need to have a plan to show you that they are capable of making payments and that they will not mess anything up. You also need to stay on them to make sure things are going well. You do not want to be surprised some day that there are bad marks on your credit report because of your co-signature. The signer must prove to you that they are worthy of your help in this situation and that they will do everything they can to make sure things go perfectly. If they do not want to listen to you then they should not get your help.

Rule Out the Unexpected

The whole goal behind co-signing is too make sure that nothing unexpected happens to you. You must be aware of all the terms of the mortgage and you must know where your fellow signer stands. You are already putting your credit on the line in order to make this go through, so you should treat it just like you treat your mortgage. The worst thing you can do is co-sign and then never wonder about it again. That is how you could get a bill for the mortgage on your front door step. Co-signing is a nice thing to do. Just make sure that it benefits you and your fellow signer. Nothing negative should come about from it.