A quitclaim doesn't relieve you of the financial obligation to pay off the loan, it just takes you off title (the worst case imaginable...no legal ability to do anything with the property, but financially liable).
Question - If she has stable income and cash reserves, why does she need you to co-sign. Something doesn't add up!
As far as hurting your chances to qualify as a first time home buyer, I don't know. I would suggest speaking with a qualified lender, real estate attorney or your CPA..
I have a couple of useful links for you to review to help you make an informed decision. First is a link to the summary of the '09 Stimulus package directly from the Senate Finance Committee:
The second is a link to a page on the IRS that defines what a "First-time homebuyer" is:
Based on what I have read here, it appears that, on its own, helping your relative may not negaitively impact a tax credit due when you buy your own home, especially given that it's likely that the purchase referenced is for investment property (if not, most loan programs do not allow income from "non-occupant co-borrowers" for qualification anyway..). However, Marcy makes a brilliant point that your qualifications will be affected by co-signing for any loan, and Dave makes another brilliant point that if your relative cannot qualify on his/her own, that you need to be prepared to keep the payments current or face consequences associated with delinquency.
Please feel free to call me at 650.543.8001 with any further questions.
i trust my relative that she's going to make the payment, she had a stable job, enough money and properties for back up. Also, she's going to take my name out through "QUITCLAIM" as soon as she can (3-6months), or as soon as the deal is closed. My concern is, does co-signing for someone makes me a 2nd time buyer when i decided to purchase a home for myself. She and her realtor said that my 1st time buyer benefits will not be affected, for the reason that i am not the "PRIMARY" buyer.
Co-signing makes you legally responsible for that loan. If your relative doesn't make the payments, who do you think will have to make them? In short, you.
Sometime parents do this for their children (to give them a little help). But rarely is it a good idea if you don't already own. You might help your relative a purchase a home but at the expense of you obtaining one. I don't recommend it.
FYI - when you co-sign for a loan that amount is also included on YOUR CREDIT REPORT, this amount will increase your debt ratio to income. It COULD impede purchasing a home.
Have all investigated prior to agreeing with anything