Co signing for a house for family

amother

Moonstone

Sat, Aug 24 2024, 10:27 pm

Another thing that no one mentioned. Talking from experience, it happened to a relative of mine. If the couple asking you to cosign ever divorces, which you wouldn't know at this point, you never know what problems you can be enmeshed in. One being that the spouse that isn't your blood relative doesn't make payments etc etc...

Genius

Sat, Aug 24 2024, 10:34 pm

amother Dimgray wrote:

Undeclared income presumably? Which would suggest they are not scrupulous in their financial dealings and make me even less inclined to get involved.

Credit that isn’t old enough can also need a co signer. Someone in their low twenties might need a co signer even if they’re doing well, bCredit that isn’t old enough can also need a co signer. Someone in their low twenties might need a co signer even if they’re doing well, because they’re not doing well for long enough. No reason to suspect unscrupulous deals.

amother

Magenta

Sat, Aug 24 2024, 10:55 pm

amother Chartreuse wrote:

Coming from the other side- it’s only thanks to a sibling who graciously co-signed that we bh got a mortgage approval. And no, it has not affected sibling in any which way (other than the immeasurable schar)

Same experience. My parents cosigned for us years ago (house is paid off since then) and we are so grateful as their cosigning allowed us to get a better mortgage rate that saved us thousands and thousands of dollars over the years.

I would definitely cosign for immediate family members.

amother

Forsythia

Sat, Aug 24 2024, 10:58 pm

I'll be another voice of dissent here.

This can be a tremendous chessed for someone who is stuck in a basement/apartment IF you do your homework and know they can comfortably cover their mortgage.

Lenders look at income and debt when determining if someone can pay a mortgage. What they DON'T look at is:

-Any govt help the family gets
-Any parental support the family gets
-Their estimated future earning potential. For example, if they just opened a business and expect it to grow, or they work at a job with built-in raises and promotions etc.

I'm not saying to jump into this blindly. Absolutely do not. But if you have a real conversation with them about how they plan to cover their mortgage every month and you feel comfortable with this plan, this can be a real chessed for a family that has no other way to buy a home.

notshanarishona

Sat, Aug 24 2024, 11:28 pm

amother Dimgray wrote:

Undeclared income presumably? Which would suggest they are not scrupulous in their financial dealings and make me even less inclined to get involved.

Not true, as someone self employed I am able to deduct expenses from my total income to pay less taxes. This has come to hurt us with getting a mortgage.
If you can afford to cosiggn this is a huge chessed but only do it if you can afford

amother

Junglegreen ↓

Sat, Aug 24 2024, 11:39 pm

amother OP wrote:

My family is asking us to co sign for a house they want because they’re not making enough money to show they can afford it.
Anyone do this? Does it affect us later on if we want a house, car…….
It’s hard to know if it can affect us later on

NO!!!!!!
Full stop.
NO!!!!
Nothing good can come of this.

amother

Gardenia

Sun, Aug 25 2024, 4:48 am

I personally would not do it. You never know what can happen..

DH and I were very very good financially, and bought a house. After a while our situation changed drastically due to unforeseen circumstances and we are majorly struggling to make our mortgage payments. We’ve been late, and it has affected our credit tremendously. I’m so so happy no one else is on our mortgage that can be hurt by this, because there’s not much we can do until we get back on our feet

abound

Sun, Aug 25 2024, 5:05 am

we did it for someone. They are responsible and ehrlich. We signed a separate contract with them that if they cannot pay their mortgage they must sell even at a loss.
BH worked out

amother

DarkKhaki

Sun, Aug 25 2024, 5:22 am

chestnut wrote:

If they aren't making enough money to show they can afford the mortgage, how will they be paying it?

We moved to a different state. We got new jobs. To obtain a mortgage you need a minimum of 2 years with a steady income. A family member signed for us. After a set time we refinanced and removed them from the mortgage. Without their help we would not have been able to purchase the house.

listenhere

Sun, Aug 25 2024, 5:33 am

If you do this, you need to be prepared for the possibility that they will not pay.

If you think that it’s just a technicality then you should not do it as it will come back to bit you.

If you understand that they might not pay and are prepared for that, you are doing an incredible mitzvah.

amother

Currant

Sun, Aug 25 2024, 5:37 am

We did for my brother. I was relatively young newly married but had an excellent job. My brother was in kolel his wife was working as a teacher they wouldn't get a good rate.
My parents couldn't sign because they had recently signed for another brother.
I cosigned with the understanding that if they ever had a problem paying my parents or my sister in laws parents would pay.
Bh they have since refinanced and removed my name.
I was very nervous but ultimately glad I helped.

frumNYC

Sun, Aug 25 2024, 5:39 am

amother OP wrote:

The sad truth is money affects relationships. However this is a huge mitzvah. If you are in a position to step in in case they can’t make a payment (think of it as a donation).
That is the only way I would do it. Or for an international person who doesn’t yet have credit but has the cash.

amother

Teal

Sun, Aug 25 2024, 5:42 am

amother OP wrote:

If you are worried about your own ability to get a loan for a house or car then you cant afford this.

Both because you are in a position to need a car loan do you are not flowing with cash.

And also because, it is debt and will be counted against you.

If you are young and are still in house purchasing stage this is not for you.

amother

Sage

Sun, Aug 25 2024, 5:48 am

Deedee32 wrote:

Ask any financial planner, they'll tell you no way!

Deedee is right. Only co-sign if can afford to lose money. Otherwise don't.

amother

Heather

Sun, Aug 25 2024, 5:52 am

When I bought my first condo my mother signed on my mortgage.

And I did the same when they needed to renew their mortgage.

Eventually we took off each other's names so we only had our own name on the mortgage.

I would say depends which family member.

amother

Indigo

Sun, Aug 25 2024, 5:56 am

To sum up

NO NEVER

You are relying on not just the honesty - but the financial ability of people to make payments

Even one late payment will impact your credit rating and will show up for seven years on your credit score.

Since it is YOUR loan, it will be factored into every other loan you apply for including mortgages and car payments. It could impact the interest rate you are offered

A poor credit rating also can impact your ability to get insurance or even a job as it is factored in

The only time I would co-sign is for a child and that is only because I am past the age of caring about my credit AND because I am financially able AND WILLING to take over house payments for a child if it came to that. What parent who had the financial ability wouldn't pay for their kids' house if the child was in a bad position financially for any reason.

amother

↑ Lavender

Sun, Aug 25 2024, 6:12 am

Look, there will always be success stories. That's why it's still a thing.

The reality is though, that very often these things go sideways.