My mother in law wants my husband to co-sign for a mortgage because of her credit. My problem is we want to buy, rent a house within the next 6 months. Will the credit of my husband's be affected if he co-signs for this loan or will we be able to get a home with him on her mortgage.
2007-06-17 06:11:58 · 6 answers · asked by Kathryn G 2 in Business & Finance ➔ Renting & Real Estate
Well, first of all, it's his mom, so obviously you'll both have to handle this one with kid gloves. That aside, your husband's credit will only be affected negatively if your mother in law doesn't make the payments. If she already has a bad track record of this, you'll need to have a long talk before signing, because your husband/you will now be responsible for your mother in laws mortgage payment by cosigning, and if she doesn't make a payment, it's like you didn't make a payment which would definitely affect yours and your husbands credit adversely.
If you and your husband feel that your mother in law is worth the credit risk, then you'll need to also realize that you'll need to qualify for your new home based on carrying your new home mortgage and half of your mother in law's as well.
If you are both okay with this and feel you can qualify with all the factors involved with the transaction, by all means help her out. If it were up to me though, I would help my mom any way I could without cosigning, if she already had a history of credit problems. I would probably give cash to help, in lieu of cosigning, unless there is no other avenue of approach.
Rational thinking aside, if it's my mom, I'm helping her regardless of how it will affect me in the future, so I realize you are in an unenviable situation.
Good luck.
2007-06-18 04:38:44 · answer #1 · answered by Anonymous · 0⤊ 0⤋
You are definately setting yourself up for massive amounts of grief. NEVER EVER co sign on anything. If the bank doesn't think this person is credit worthy then they will most likely default on the loan, leaving your husband on the hook to pay them back.
The biggest problem is that she will default on the loan and you will not even find out about it until it has effected your husbands credit. Then you will work the next 7 years trying to pay back a loan and cleaning up your husbands credit. Not to mention what this will do for your releationship with your outlaws. I mean inlaws. Sorry slip of the tonge there.
Just say no to drugs and say no to co-sign. It is a loose - loose situation. And you guys will be left holding the bill, probably a forclosure on your credit and a bill for 30,0000 dollars when the bank reposesses and sells the house at a loss. All of this will happen before you even find out she was behind on the loan.
Now having seen this time and time again go bad myself. It is likely that your husband will co-sign for the loan. And there is probably nothing you can do to stop this, so you need to make sure all your bases are covered. If he does choose to co-sign, do the following so you can take action before the mess hits the fan
1. Make sure that the mortgage company sends you both a monthly statement. The monther and you guys, so you can see if it falls behind.
2. Make sure you have an emergency fund of at least 3 months worth of payments just to cover them if the mother cannot. This should be an extra 3 months on top of your standard 6 months of living expenses. You can use these funds to pay the mortgage when she doesn't. Believe me if her credit is bad she will be late.
3. Make sure your husband has at least a 1% ownership in the property so you guys could make the mother in-law sell it if there was an issue with the mortgage going late.
4. Make sure there is equity in the home so if the home market drops in that area you can still sell the home without further losses.
5. Seek further outside advise.
It is a bad situation, taking the above 4 steps can save you a world of hurt and problems with your marriage. I wish you the best and hope you both decide not to co-sign.
2007-06-20 12:14:59 · answer #2 · answered by FinanceFreedom 2 · 0⤊ 0⤋
Do not ever sign for any one then may be your own child so he can get going.
Some one with bad credit will screw your life. I have done it never again would I do again.You can for get about being able buy your house.Till such time the loan is repaid that you co sign.
Co sign means you have taken the mortgage out she pais or not you will have to pay and she will own the house and you will own the loan. Stay away from her.
2007-06-17 06:20:05 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Being cosigned on his mom's mortgage could definitely affect his ability to get a mortgage for a house you want to buy, since the lender would look at ALL of his debt and his mom's mortgage would be included.
2007-06-17 06:20:44 · answer #4 · answered by Judy 7 · 1⤊ 0⤋
not only does it affect his credit but yours too. i doubt that there would be any lender that would loan you money for a house with him as co signer on another loan. if you make a lot of money then you could try to get a mortgage in your name only.
2007-06-17 06:16:23 · answer #5 · answered by george 2 6 · 1⤊ 0⤋
avoid this one.
you will be sorry one day
2007-06-17 06:19:04 · answer #6 · answered by Anonymous · 1⤊ 0⤋