Should we cosign for our son's mortgage?

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Question:

My husband's son has asked us to cosign for his first home mortgage loan. We have three questions.

  1. What are our rights and responsibilities if we do so?
  2. Will the loan show up on our credit report?
  3. If he should make late payments, will this affect our credit rating?

Answer:

Rights? Being a cosigner is a status that carries with it no rights at all. In fact, there used to be some adage about how cosigners were nothing more than Fools With Fountain Pens. Responsibilities? You are 100% responsible for complete repayment of the loan.

If the lad makes the payments on time, a record of that may or may not show up on your credit report. It depends on the creditor. Not all of them report to cosigners' credit reports when payments are made on time.

If he pays late or defaults, that information will most certainly show up on your report as a black mark. And as a cosigner, you will then become liable for repayment. The creditor can come after you as though you were the primary borrower.

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