I am helping my cousin buy a house because his credit is not good,we are putting the house in my name because I have better credit.I am only trying to help but is there any way I could also benefit from this venture while its still under my name?Thanks
2006-09-30 03:51:22 · 6 answers · asked by medotech 1 in Business & Finance ➔ Renting & Real Estate
Don't do it, don't ever do that, even for a brother or parent or child. I have regretted extending credit to those with poor credit history. Plan to lose every bit of money you borrow.
2006-09-30 03:54:27 · answer #1 · answered by finaldx 7 · 1⤊ 0⤋
I assume that, since your cousin's credit is not good, that the LOAN will be made to you. Therefore, the loan will be on YOUR credit report. It doesn't matter WHO is on the deed ... whoever is on the loan is ultimately responsible for making the payments.
If you are CO-SIGNING a loan for your cousin, you should know that you are just as liable for the debt as your cousin is and if he doesn't pay, you'll have to. If the loan defaults, and you are a signer or co-signer, it will be reported on your credit report...regardless of the names on the deed.
You can benefit, in that if the loan is paid as agreed, it will probably improve your credit rating.
HOWEVER, if you apply for credit in your own name and a lender looks at your credit report, this loan will indicate a monthly obligation which will be counted in to your income-expense ratio, even if you're not making the payments.
I would strongly advise that you NEVER co-sign on a loan. Most people with poor credit don't change their ways, and you'll get stuck with the debt. DO NOT assume that you'll be repaid anything you lend to a relative/friend/family. It sounds as if you and your cousin are friends (if you want to help him) -- that friendship will END if money is owed.
Let your cousin find his own mortgage lender. There are some who will lend to people with poor credit.
My answer is based on the assumption that you're in the USA.
2006-09-30 04:21:35 · answer #2 · answered by paleblueshoe 4 · 0⤊ 0⤋
Whenever you help someone out whose credit isn't so good, is always a risk. The thing to keep in mind here is that you're performing your cousin a service and a favour. Nevertheless, what you can try to do is cash in on the house's equity after a few years. You can try to refinance and pocket the equity. Your cousin stands to pay less after the transaction and you have some spare cash to do whatever you my want to do. So, I guess it would turn out to be a win-win deal.
2006-09-30 04:37:33 · answer #3 · answered by Nestor Q 3 · 0⤊ 0⤋
buy the house put a second mortgage on it and use that money in case he gets behind and don't pay it use that money to pay for it and charge it back to him/her.
Also you could pull the equity out of the house and put it into a savings account for you in Case this does happen and you can always rent the house for the payment. It is a investment for you and already you have income coming back in from it.
2006-09-30 06:50:57 · answer #4 · answered by WILLIAM W 2 · 0⤊ 0⤋
Well gosh, when your cousin fails to make the payments, guess who will?
Of course if the house goes into default, and is sold for less then it was purchased, guess who will have to make up the difference, and whose credit will then be ruined?
2006-09-30 03:56:04 · answer #5 · answered by festus_porkchop 6 · 0⤊ 0⤋
Because it is titled to you, you have can take all the tax benefits from owning it. It becomes part of your overall net worth.
2006-09-30 05:20:49 · answer #6 · answered by Anonymous · 0⤊ 0⤋