Co-Buyer Or Owner Of Property
REM #F743
By Ilyce R. Glink
Summary: A ThinkGlink reader helped a friend buy a home and he his now concerned about the friend's ability to pay for the home. Ilyce explains that his credit score depends on the payment of this mortgage.
Q: My friend just bought a house a month ago and I agreed to be the co-buyer
of the house.
Now, I want to get off of the title because my friend who bought the house just told me the he will not be able to make these payments since his wife lost her job. But, I don't want to pay something I didn’t want in the first place.
He does not know what to do. What should I do? I am just the co-buyer.
A: You're not the co-buyer -- you're an owner of the property and I presume
you're listed on the mortgage as well. As far as the mortgage lender is concerned,
you are (and always were) considered a primary borrower on the property. If
your friend fails to pay the mortgage, the lender will come after you for the
money and his failure to pay on the mortgage can hurt your credit history and
credit score.
What you should do now, if you want to protect your credit history and score,
is to make the payments on this property. If you're listed on the mortgage,
you're legally liable for those payments. If you fail to make the payments,
the lender will foreclose on the property and it will destroy your credit.
If you can't make the payments, tell your friend to move out of the property,
and find a renter to help defray costs until you can get the property sold.
Unfortunately, you've discovered the primary danger of "lending a signature"
to someone – if that friend suddenly can't afford to make the payments,
you're on the hook.
For more details, please seek the advice of a good real estate attorney.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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