Heads Up On Co-signing Loans

Heads up on co-signing loans

Summary: Be wary of the dangers behind cosigning loans. You may think you're helping your child buy his first car, but the facts go deeper than that.

tax deductions, tax tips, wealth building

Article Body: In my opinion, if you co-sign a loan with a family member or a friend, youre looking for trouble. Granted, if you want to help your child buy his first car, you may need to co-sign because the child does not have credit history yet. The danger is that if your son makes a late payment, the bank will come to you to pay it off. Be extremely judicious who you co-sign for. Because of the risk that another person could damage my credit, I will never co-sign for a friend or family.

Its not homework, its an assignment Outline the following; read these documents and understand every clause. Theres good and bad risk. Make sure you have the skill set to take a calculated risk?

. home mortgage(s) . credit card agreements and statements . car loans or leases . insurance contracts

Get answers to these questions: Do I understand the rules of this contract? Do I understand the amount of risk Im taking by agreeing to this contract? Do I understand tax laws surrounding the contract? Does the contract fit my priorities? Forget whether you think you deserve it (because you probably do)can you afford it? Can I afford to lose all or part of my money by engaging in this contract?