Co-signing a note

"What does this mean? And will I be responsible for the payments?"

This means that you are signing for another person and stating that if for any reason they default on the loan you will be responsible for the note, your credit will also be effected in the event of late payments or foreclosure.

Since you are jointly responsible for the mortgage payment this may affect your ability to qualify for new loans in the future.

Co-signing on a note is a good way to help someone establish a credit history. This should only be done with extreme caution, however. Any missed payments will effect both the signer's and the co-signer's credit report.

Most problems with co-signing occur when the two parties are only somewhat acquainted (for example, they have worked together for one year)...in this case, the two parties may move on to different jobs and never talk again, but both are still equally responsible for the debt.

Your credit report will also reflect this as a mortgage.

It is a great idea if you and the co-signer are completely aware the benefits AND risks.

If you Co-sign for a note then you are agreeing to pay the debt if they dont. If they walk away from the debt you are left holding the bag. Make sure you review the risks involved prior to co-signing. It can be a big obligation.

Be sure to know the risks for co-signing on any type of loan. When you co-sign, you become equally responsible for the loan, no matter if you are just trying to help a friend get qualified.

For more information regarding this topic, please call Mike Williams at 516-921-9000 or email mwilliams@northshorefunding.com.