You have been asked by one of your children to co-sign a note; either for a car, apartment or house.
Where do you stand from a legal perspective?
- Ownership of property. Unfortunately, being a co-signer doesn’t give you rights to the property, car or other security that the loan is paying for.
- Repayment of the debt. The most important thing to note is your financial responsibility.
The failure of the repayment of debt to the co-signer is responsible for the slack. Including penalties, late fee and additional interest.
- Application consideration, there will be a hard credit check on your record.
- Credit impact if there are any late or consistently late payments.
- Removal from the loan if the primary signer gets behind, but you need the lender to release you. They were not lending the funds without your backing, so this is unlikely.
Caution must be used if you are considering being a co-signer. You need to have the financial wherewithal for the debt.