“Co-Signing a Mortgage”

“Co-Signing a Mortgage”

I was contacted by a client of mine a few years ago. He called to discuss his daughter’s request to have him co-sign a mortgage for his daughter. I asked a number of questions and based on the answers, I recommended that he not co-sign the mortgage. He asked if it would be OK if he had his daughter call me, even though I knew the conversation wouldn’t be pretty, I told him sure.

I seemed like within a few minutes the daughter called berating me to attempting to talk her father out of co-signing the mortgage. I told her I understood, but even went as far as attempting to talk her out of the purchase.

I don’t remember the exact numbers, but she made about the amount of what the mortgage payment was going to be. He told me that her boyfriend, was going to pay rent, which would make up and shortfall. I then asked her, what if the boyfriend moves out. The conversation didn’t last too much longer.

The father was convinced to co-sign and the “S**t” eventually hit the fan and the father’s credit got hammered. Fast forward to now, he wanted to buy a condo in Florida and there is no way to get him a mortgage. He is going to end up buying a trailer in a park and has to pay cash.

The bottom line, in certain situations co-signing a mortgage for someone can be OK, but the math has to make sense and second, the goal should always be to get the co-signer off the mortgage as soon as possible.