Co signing for a house for family

amother

Powderblue

Sun, Aug 25 2024, 9:42 am

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.

Why jump there? My income couldn't count towards are mortgage loan as I'm self employed but not for long enough for the bank to count it. We have my income included in our day to day budget but for the house only had my husbands income for the loan approval. BH it was enough and we didn't need a cosigner but maybe we could've needed it...

amother

Maroon

Sun, Aug 25 2024, 9:59 am

Please be extremely careful if doing this!! I have only heard of negative outcomes from these situations

1) 1st story I heard was that the co-signer lost their ability to get the first time homeowner lower interest rate. (since the co-signed home was considered their "first home")

2) 2nd story was a family member who did this and the owner couldn't pay the bills. House got foreclosed and everyone's credit was destroyed.

amother

Wandflower

Sun, Aug 25 2024, 11:12 am

We've done it to one sibling we trusted, we also knew they can afford their mortgage. Ive had other siblings ask me, but declined.

They ended up refinancing when the rates were low and took the mortgage off our name so didn't affect us at all

Cheiny

Sun, Aug 25 2024, 6:27 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

Do not do it. You might end up on the hook for it, and also a family feud.

Amalia

Sun, Aug 25 2024, 6:41 pm

amother Offwhite wrote:

Hi we did this many years ago out of the goodness of our heart. The relative has made every single payment that’s not the issue.

The issue is that we recently wanted to take out a home equity on our home but was only given a very low amount because we had too many loans on our name. The mortgage we co-signed on is counted as if it’s a second home we own. I know everything’s bashert it was a rea disappointment

Disclaimer: I only got this idea from other posts on this thread.

Can you explain your situation to your relatives and ask them to remove you from their mortgage?

amother

Lawngreen

Mon, Aug 26 2024, 5:18 am

You have to know how they are financially but more importantly how responsible they are- like would they would be willing to take on any job and stop all extras in their life just to make payments? I wouldn’t co-sign for all of my husbands siblings and some of my siblings but I would for some… you really have to know them. I WOULD co-sign for a loan though if they needed just for down payment. The idea that someone said to have a separate legal document saying they have to sell even at a loss if they can’t make it is a smart idea.

amother

Royalblue

Mon, Aug 26 2024, 7:11 am

I am surprised at the responses here. I come from family with no money. We had no help buying our home and nobody to cosign. I offered to cosign for my siblings when they are ready to buy a home. It's my sibling! Not a random person! I would be so happy to do that kind of chesed. Of course they will pay their mortgage!my sister is in kollel and college and can't get a mortgage bc no income right now but she's almost finished and bH was able to put away money over the years and can now afford a down payment but no mortgage. To me it's a huge cheese I would be honored to do

Ruchel

Mon, Aug 26 2024, 7:21 am

chestnut wrote:

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

That's not necessarily true. Some places are crazy and ask for the mortgage be a small percent of what you make. But I still would never do it except if I could pay the whole thing and for a child.

amother

Feverfew

Mon, Aug 26 2024, 7:30 am

amother Royalblue wrote:

If only it was so simple in all families.

What about if you have multiple siblings on both sides and many ask you?

amother

Waterlily

Mon, Aug 26 2024, 8:46 am

amother Royalblue wrote:

It's not that people don't have good intentions. The concern is what happens if/when things get tough. You can be dragged into their financial mess, even if they had zero intentions to do it.

Also it impacts your credit as well as your ability to be your own first time homeowner, where applicable.

Doing chessed doesn't mean you need to put your own life at risk. Figure out a way to help without doing that. As others have said, if you have the financial means to step in if needed then that's a perfect scenario for chesed. Or if you are able to help them with the down-payment so that their mortgage is less and they can qualify on their own, that's a huge chessed. But putting yourself at a detriment is not exactly a recipe for chessed.