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!

 

Content © Rich Brott, 2011

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