cosigning a loan - There are times when you maybe asked by a friend, relative or some one you know to cosign a loan. While this is a great way to help out a person who normally would not get financing on their own there are also some big negatives by doing this.

If the person fails to pay the loan, your credit will suffer from that. This could affect you when you go to purchase a home, refinance your existing home, or buy a new car.

Co-signing a loan for someone you know, whether family or friend, can affect you in regards to increasing your debt to income ratio. Most lenders will still require this co-signed debt to be included into your debt ratio. Therefore, co-signing for items such as cars or automobiles can have high monthly payments and may affect your chances of qualifying for a home loan of your own.

There are many sub-prime options for borrowers with poor credit, refer them to a mortgage broker to check all their options before you consider co-signing for someone. We have access to so many loan programs we may be able to find a different solution.

When you cosign, you essentially "own" the debt. Each cosigner can be individually required to pay the entire debt should another consigner default on payment. Your mortgage professional can help you identify alternatives to cosigning.