First Time Homebuyers Should Know the Pleasure and Peril of Co-Signing

May 30, 2012

Co-signing can help those with lower FICO scoresWhile this market may be one of the best we’ve ever seen as far as incredibly low interest rates and a wide variety of foreclosures on market, the requirements for mortgages are still very tough. This can be especially hard for first time homebuyers with shorter credit histories, but the Equifax Finance Blog has an article on a way around that problem, “

Protect Yourself and Your Credit When Choosing a Co-signer.”

Co-signing is an excellent way for those with either low credit or damaged credit to work with someone with strong credit to make large purchases. While it can take a long time to build or rebuild a person’s

FICO score, co-signing acts like a jump-start to allow better funding.

There are risks, however. The co-signer is taking responsibility just like the co-signee for the loan. For instance, if the co-signee fails to make payments then the bank can go after the co-signer for the loan. The co-signer is also connected to many of the terms, responsibilities and liabilities as the original signer. It is for reasons like these that both the co-signer and co-signee need to know each other well and be honest about their respective situations.

For more information about

personal finance advice, check out the Equifax Finance Blog.

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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