A coworker has asked me to cosign for him on a home loan. What is my responsability as a cosigner?

Asked by Percusion23, Los Angeles, CA Tue May 12, 2009

I am currently paying two houses and have a great credit score but my income is just enough to cover my mortgages.

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Steven Ornel…, Agent, Fremont, CA
Tue May 12, 2009
Hi Percusion23, we first need to clearly define what you really mean when using the term "Co-signer." There are various loan programs available today, and for our purposes I’m going to define these as FHA and Non-FHA. In the Non-FHA world there is no such thing as a defined “Co-signer”, there is only a Borrower and Co-borrowers. However, in the FHA world Co-signers are additionally defined. Here are the different distinctions:

Borrowers and Co-Borrowers take title to the property, are obligated on the mortgage note and must also sign the security instrument. The Borrower/Co-Borrower’s income, assets, liabilities, and credit history are considered in determining total creditworthiness of the transaction. On the other hand (just FHA world now), Co-signers do not hold ownership interest (title) in the property, but are liable for repaying the obligation and must sign all documents with the exception of the security instrument. The Co-signer's income, assets, liabilities, and credit history are considered in determining creditworthiness for the mortgage and the co-signer must complete and sign the loan application.

So, are you a Co-signer or Co-borrower?

Either way, seek professional tax/legal consultation before agreeing to do this, as ramifications can be serious without proper contractual protections.

Best, Steve
0 votes
Dallas Texas, Agent, Dallas, TN
Tue May 12, 2009
The home will be placed on your credit scores, you are held responsible for mortgage as much as your co-worker, Who will pay for property taxes, insurance and etc? If he moves out who is responsible for mortgage 50% on both including tax, insurance, maintenance and etc?

I would have all in writing co - worker walks you on line for entire payment keep tanking your credit scores. You won't be able to sale property they would be on title unless you have their authorization .

Much more involved than just signing a documents.

You gets tax benefits, confer with attorney and CPA.

National Featured Realtor and Consultant, Mortgage Loan Officer, Lecturer regarding Credit Repair
Lynn911
Web Reference:  http://www.lynn911.com
0 votes
Dyanna, , California
Tue May 12, 2009
The responsibility is the same as if you were the sole owner of the property.

Dyanna
0 votes
Marilyn Gibs…, Agent, Saint Charles, MO
Tue May 12, 2009
If you don't have available credit to qualify for the mortgage for your coworker, it will probably be of no advantage for you to cosign.
Be aware that for possibly the next 30 years your open and available credit will be "limited" by being on the line for his loan. If he does not make the payments, you are responsible... it could ruin your credit.
Web Reference:  http://www.marilyngibson.com
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