Fast House Buyers Orange County FL: Foreclosures affect the cosigners on the loan, too. If you have cosigned for someone’s mortgage loan you will be legally held responsible to repay the loan or suffer a repossession foreclosure on your credit. The late payments that are made by the homeowner are also recorded on your credit score.
Cosigning on a loan is putting your responsibility up for the borrower. If there’s not enough credit history or a history of bad credit or not enough income, a borrower can be granted a loan with a cosigner. The reason for this is to guarantee the lender that the loan will be repaid either by the original borrower or by you, the cosigner. In most cases it’s the only way the loan would have been granted.
If there is a foreclosure looming on someone you have cosigned for be prepared for the possibility that the lender will come after you. The lender can attempt to seize any assets you have that would help to pay the loan off. That’s usually done before the foreclosure is filed. The agreement you make as a cosigner is to pick up the slack on the loan payments when the borrower can’t or won’t. That’s what you signed for when you chose to cosign.
There is a rule of thumb that should be adhered to when being asked to cosign. If you can afford to make the payments for the borrower if something negative should happen, it would be reasonably safe to go ahead and sign with them. If you cannot afford to pay their mortgage and yours, too, you should under no circumstances cosign for a loan.If your credit is excellent, the loan company may be happy to grant the loan as long as you sign onto the responsibility.
Consider, though, that just because your credit is great doesn’t necessarily mean that you are able to pay what the borrower can’t when they run into hard times.When this occurs, talk to the other borrower about selling the house fast and getting out from under it before it ruins your credit along with the homeowner’s. You can also ask them to move out and you can take over the payments if that makes sense in your situation. That might allow you to leave your current home, especially if you rent, and move into the house you are cosigner on. You can take over paying for the house and save the mortgage from foreclosure.
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