6 Things For Co-Signers To Consider

General Nicole Perri 14 Nov

Are you thinking about co-signing on a loan? If you’re looking to help out a family member or loved one, a co-signer can help overcome stress testing and borrowing limits.

However, it is important to be aware of the implications when co-signing on any loan.

Credit History

If you are acting as a co-signor on any loan, you allow them access to your credit history. This means, if the borrower is late on payments or have any issues with repayment, it will affect your credit.

Legal Implications

Always be sure to understand the taxes, legal and estate situations that accompany co-signing, should the borrower fail to pay. A lawyer can help you review the loan agreement and advise of any noteworthy items.


Understand how many years the co-signer agreement will be in place and what your options are for making changes. This will help you determine the scope of the loan and if you can make changes at any point should the borrower become able to assume the entirety of the mortgage on their own in the future.

Personal Income Tax

Depending on the loan, you may have an obligation to pay capital gains taxes. Hence, it’s a good idea to review your tax situation with an accountant before signing off on the agreement to ensure no surprises.

Relationship with Borrower

This is a vital consideration for going in on any loan. Do you trust the individual? Are you aware of their financial situation? Are you willing to potentially put yourself at risk to assist them? These are all important questions as many of us may want to help out family or loved ones, although it is important to ensure that the individual is reliable.

Future Finances

Lastly, consider your future finances and if you have any plans that could be impacted by an additional loan. How much flexibility do you need for yourself and your family? If you have plans to refinance for a renovation or make changes to your mortgage, being a co-signor could affect your options.


In summary, co-signing for a loan always requires careful consideration as it is a large responsibility. However, when done correctly with people you trust, it’s a great way to assist loved ones with homeownership. If you are considering co-signing on a loan and have any questions, please don’t hesitate to contact Nicole Perri today!