Home is really big ticket item for a middle class individual as it entails several financial commitments. Mortgage loan, or simply a home loan, is also a huge commitment and involves a whole bunch of paperwork. But the most important thing is the income and credit score after which you qualify for a loan. For those who have an income lower than the eligibility levels, the banks also give the opportunity of inviting co-borrowers into your loan.
Now, if you have been asked by a close friend or a relative to be a co-signer for his home loan, do not just jump into the deal. You might completely trust your friend, but you should not forget that it’s a dog eat dog world. So before you agree, here are a few facts related to co-signing that you must consider-
Responsibility Comes With Risks
Co-signing a home loan is not just a goodwill exercise that you can do for your friends. It puts on you as much responsibilities as the primary borrower himself. If the primary borrower fails to make the payment or if anything else goes wrong, you will be held equally responsible. The proceedings and payments of this loan will also have direct impact on your credit score. [Read more…]