Legal Question in Real Estate Law in California
should i co sign a home loan for my 23 year old daughter, and 26 year old fiance. they both are employed and make enough $. but past issue for him keps them from being able to use his name on loan. my daughter has only been on job for six months. so they have the $,but not the credit on her own . so in 2 years he can be on a loan, and she have 2+ years of work at same job. if i do this i will wont to have them change loan at that. into there names and not mine. i want to help them out but not sure of issues on me, once i sign on the dotted line. any help willget me started. i have more to ask .after i hear about this .thanks mike g.
3 Answers from Attorneys
Most lawyers will say never co-sign or guarantee payment with anyone, for anything, and I'd be among them.
The risk to you is shown to be especially high by "finace" and "past issues" which are red flags.
If you place yourself at risk for the couple's mortgage obligations, you should at least get a second deed of trust on the property as security for any future payments you are required to make. See a real estate lawyer in the county where the home is situated.
If you co-sign any loan, you and your credit rating become fully liable for repayment of that debt. If they default, your credit rating is destroyed.
When you cosign for a debt, you are essentially taking out a loan yourself, since you are 100% as responsible for the loan as they are, and you will have it on your credit report as your loan which will lower your credit rating even if they don't default because it will show you having more debt to income. And then you are giving the other people the money and hoping they not only are willing to repay, but will be able to repay for up to the entire term of the loan. So you are betting that nothing could possibly happen to them that would mean they couldn't pay. You're betting they won't lose thier jobs. That they won't be in an accident. You're betting your credit rating and possibly your entire financial security on what happens to them for up to 30 years. The only thing that could be more foolish than that is doing it for someone who has "issues" that prevent them from getting the loan themselves based on being the "fiancee," not even husband, of your daughter.
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