Should I Cosign A Loan? What Can Go Wrong?

Who Can Cosign On A Mortgage Loan?

Anyone can cosign for another person. It does make you fully responsible for the loan.

When you cosign for a mortgage, the mortgage loan is registered on your credit bureau and the other owners credit bureau

A person should only cosign a loan if they are paying attention to the bills as much as the owners is. That we you can ensure the payments are being made.

Who Should Cosign A Loan?

For the most part, I recommend only responsible parent, grandparent, sibling or spouse. With a major focus on responsible. As your credit can get ruined if you cosign and the buyer does not pay the bill.

Other people can cosign, but it is at your own risk of course.

What Will Happen If I Cosign?

If your income or credit is good enough, the buyer will be approved for the loan.

Take a look at our other video the 5C’s of credit to find out if you would qualify.

What Are The Risks Of Cosigning A Loan?

1. If payments are not made, you can be subject to collection.
2. If payments are missed, it will go as a missed payment on your credit bureau. So yes your credit can get destroyed.
3. I’ve seen it so many times in divorce scenarios where the spouse that does not feel the loan is theirs, stops paying attention and they get their credit ruined by the other partner. Or both parties disagree on who is responsible so payments stop.
4. You can go into major debt if payments are missed.

Overall cosigning a loan is a major risk and should be researched before doing so.