Rich Brott

I Am Determined to Become a Co-signer

Posted by Rich
August 23, 2008

I Am Determined to Become a Cosigner

While I believe that biblical concepts and practical horse sense suggests strongly that you do not do so, and that cosigning anything is a huge mistake you most likely will regret, if you so insist, here are a few guidelines.

· Be aware that you are borrowing the money.

· Be sure you can afford to repay the loan.

· Before you pledge any of your personal assets to secure the loan, make sure you fully understand the potential consequences.

· Know that you are assuming full responsibility of the entire debt.

· Don’t be pressured into cosigning anything without first understanding the full scope of the paperwork.

· Negotiate all terms favorable to you before agreeing to sign.

· Ask for copies of all paperwork, including the loan contract, the Truth-in-Lending Disclosure Statement, and warranties and other important documents.

· Require the lender to provide you with written notification within two weeks if the borrower ever misses a payment or violates any other terms of the contract. Get this lending agreement in writing.

· Ask the lender to provide in writing all the extra costs to you should you end up paying the loan.

· If property is being purchase with the loan, be sure your name is listed on the deed of trust.

· If a vehicle is being purchased with the loan, be sure your name is also listed on the title.

· Be sure the asset is fully insured should something happen to it during the life of the loan. Be sure you obtain proof that the insurance premiums have been paid.

· Once you cosign a loan you are responsible for 100% of the entire loan (not just 50% of it).

· Beware of all the risks involved and take steps to minimize them.

Your thoughts on this subject? Your comments appreciated!