Total Money Makeover Question 7

dwallyfam · 10-01-2006, 09:08 AM

Sorry I haven't been here keeping up with this. Work is just driving me crazy.

So next Myth is

Myth: By co-signing a loan, I am helping a friend or relative.

Truth: Be ready to replay the loan; the bank wants a co-signer for a reason, which is that they don't expect the friend or relative to pay.

What are your thoughts on this one?

For me I believe this to be true. I only once have helped a friend co-sign a loan. We got into so many fights about the loan that we are no longer good friends. We hang out occasionally with other people, but not like we used to.

Amanda W · 10-01-2006, 11:58 AM

I agree. My MIL refinanced her house a few years ago with DH also on the mortgage. She is extremely frugal and always pays her bills on time, but I still worry a lot about what would happen if she got sick or wasn't able to make the payment for some reason. I think it's a horrible idea, and I'm not sure I would even do it for our kids when that day comes.

PennyPinchinPam · 10-01-2006, 02:31 PM

Never, ever, ever!! Uh-uh no way! It's such a bad idea and can ruin you financially.

FarmerSue · 10-01-2006, 02:44 PM

I have never done this for anyone and no one has ever asked us to do this for them......THANK GOODNESS!!!!!!!!!!!!! I've listened to enough of dave on the radio to know this is a BIG NONO!!!!!!!!!!!!

LastDragonfly · 10-01-2006, 02:50 PM

I agree with everyone else. This is THE BIG NO NO. We would not do this.

Dsd came back to live with us and has alot of financial strife for being only 20 and her dad told her to read total money makeover as we would not be helping her by co-signing any loans. We note however, that even though this book has been made available to her, she is doing everything in her power not to read it. Hmmmmmm

autumnlynn · 10-01-2006, 04:41 PM

I agree, no co-signing ever!! If you co-sign you are responsible if the other person doesn't pay. You can be ruined financially.

Jill B. · 10-01-2006, 05:28 PM

We were going to co-sign an apt. lease for our daughter when she was 20. She was a full-time student and moving into an apt. with a friend. She was pretty much on her own at that age. We have helped out occasionally but she if very independent. We didn't sign the lease because we couldn't get there in time. Her room mate's parents co-signed.

That is different than a loan but the co-signer is still responsible. I wouldn't sign a loan for a friend or other family member that is not my child.

FrugalMomof3 · 10-01-2006, 05:44 PM

I personally would never be a co-signer on a loan not even for the kids, may sound mean to others but I financially cant afford to should they not be able to pay. My advice to you: DONT DO IT!

chisgran · 10-02-2006, 09:37 AM

Well, I did co-sign for a new car for my daughter. The result? I am now driving & paying for it. Of course, my daughter was extremely responsible at the time, giving me her paychecks every week & on top of that, her car kept breaking down. Was I the stupidest woman on the planet? You betcha.

I would never ever do this again. If you're thinking about it, it's in the Bible for a reason. And when I take the wisdom from the Bible, it's always right.

littlemotherhaywood · 10-02-2006, 09:56 AM

When my dh bought his first car (not his "first" car just the first one he bought with a loan) his dad co-signed so he could get a good rate because he didn't have well established credit. We never missed a payment on that car and paid it off early by two years in fact. Even though we were responsible, I've learned by watching others in similar situations have bad experiences and I don't think I would ever co-sign for anything. Even my dh and I have everything separate. No reason, it just worked out that way. We cannot afford to be responsible for others mistakes so I have to agree that this is a no-no. During our car repayment period, my dh was unemployed for a while and how we managed, I just don't remember. We did refinance it for a lower rate through our credit union after a year as well.

rachelMcK · 10-03-2006, 09:53 AM

Well, I would never co-sign on a loan, but I'm also in the position (DH and I both) that we needed a co-signer for our student loans. His mom signed his and my dad signed mine. Which is great and all, but I wish they didnt have to. It drives me nuts knowing that if something happened, the balance would have to be paid for by my elderly father. I try to do what I can but money is tight and its the same with DH's mom (though she isn't elderly). But all in all, I don't agree with it.