Family member asking for co-signer(rant)

[AZDude]

Anyone else ever get picked on for being the financially conservative/responsible person? As in other people ask for money or ask for you to co-sign on some ridiculous loan, etc...? Happens to me a fair bit and while I do the smart thing and say no, it makes me feel like a shitty person sometimes.

How do you deal with this? Not the saying no part, but the "still feeling like a decent human being" part?

[microscopes]

Maybe you are a shitty person for saying no? Depends who the person is to you.

Everyone needs a helping hand every now and then. Who knows, maybe in the future it'll be them helping you.

[AZDude]

Thanks, makes me feel much better. Honestly, I'm not sure you can relate to this, but I will think on it nevertheless.

[microscopes]

Thanks, makes me feel much better. Honestly, I'm not sure you can relate to this, but I will think on it nevertheless.

I wasn't trying to hurt your feelings, please dont take it that way. Just saying, as humans, we often mask our feelings. I mean, if youre feling shitty, maybe its for a reason. And maybe you're asking the question here, in hopes that other shitty people can tell you not to feel shitty, mainly because they feel shitty themselves. Or maybe im wrong.

But I do think I can relate. Not sure why you think I cant.

I had poor credit - Had to sign a 9.75% mortgage.

Worked hard to build my credit, and my parents co-signed me on several loans.

Because of them, my credit score is now in the high 700's and I no longer need a co-signer.

[Fred2004]

you would have to expand on "ridiculous"

money can cause huge tension...if I had a buddy that needing bailing out of jail...I would probably post the bail...unless it was for something "ridiculous"

**and to microscopes point...if someone needs a few grand and their only option is some ridiculous interest rate and they should have no problem paying you back, i don't see the harm in helping out...i guess if you are signing for a car or house, that's a lot more riding on it if the person defaults

[Miiki]

I've been burned cosigning loans, and that loan on my credit (current, being paid, and raising my debt to income ratio) is keeping me from meeting my own needs. As far as cosigning, I tell them  that I can't. I don't think that a lot of people consider how it affects you even if its being paid on time.

That doesn't mean I've hunkered down and refuse to help anymore. I've just created new conditions (for myself). Do I have the cash to give? Am willing to forgive if the cash is never paid back? If I can't answer yes to both of those then I can't help. Or maybe you asked for $1000, but I can only give/loan $400 and feel ok about it.

[ketchup]

Horror story time: 

BIL co-signed on his sister-in-law's (his wife's sister) ridiculous 27% car loan.  All was fine and dandy for about 18 months.  Then, she missed a payment and trashed his credit.  He since had to bail her out to save his own skin multiple times to the point of her owing him about three grand in prior payments.  She lost her job.  It got to the point where he was basically making two car payments each month (his own plus her outrageous one)

Then he crashed *his* car and walked away with $0 and no car.  He decided fuck it, and "repossessed" her car.  It hadn't had an oil change or anything else in 40,000 miles, needed new tires, and had some minor body damage.  After throwing about a grand at catching the car up on maintenance and making it not look as shitty, he now still owes (to my understanding) about $10,000 (at 27% interest still) on a 2011 Kia with ~100,000 miles on it and body damage, worth probably $2500-4000 on a good day.

Don't do it, man.

[Warlord1986]

Anyone else ever get picked on for being the financially conservative/responsible person?

Yeah, I got mocked for not drinking at bars and buying lots of gadgets and clothes. Their mockery made me cry all the way to Peru.

As in other people ask for money or ask for you to co-sign on some ridiculous loan, etc...? Happens to me a fair bit and while I do the smart thing and say no, it makes me feel like a shitty person sometimes.

Can't say anybody has ever asked me to cosign a loan, but if it was anybody but Mom and Daddy, I would say no too. Having boundaries does not make you a bad person.

How do you deal with this? Not the saying no part, but the "still feeling like a decent human being" part?

There's a book about boundaries: http://www.amazon.com/Boundaries-When-Take-Control-Your/dp/0310247454/ref=sr_1_1?s=books&ie=UTF8&qid=1461357518&sr=1-1&keywords=boundaries

You are allowed to have things you will not do or tolerate. That does not make you a bad person, it means you are showing respect for yourself and your resources. There's a quote in the Bible: "A man of great wrath will pay the penalty, for if you deliver him, you will only have to do it again." Replace 'wrath' with 'spendyness' and apply it to your situation.

[Zikoris]

The easiest way to put a stop to that is to critique-snark their spending. "Don't you go to restaurants regularly, have cable, and go shopping every payday? Why don't you try cutting back on those things so you don't have to ask people for money?" People tend to HATE having their bad choices put under a microscope.

If you want to feel less "shitty" and feel like you're helping them, you can do things like offer to review their budget, and so on. They won't take you up on it, but hey, you tried, right?

[WSUCoug1994]

I totally understand your situation.  I enjoy helping people as I have received coaching/mentoring along the way (primarily from my father) and I would like to pay it forward if possible.  I have found that my firm stance on not mixing money with friends and family keeps the discussion pretty short.  There is no easy answer but as long as I keep that stance the message is clear and consistent.

I also struggle when friends/family want to "invest" together.  I typically don't agree with the way they manage their financial lives but they all want to be a part of these investments where I have spent 1000's of hours putting them together.  I have seen so many relationships ruined with money that keeping them separate has worked out very well for me although I do upset a few people when they ask for help.  I have no interest (pun not intended) in putting my financial health at risk by giving someone else the opportunity to do damage to it. 

[AZDude]

If you want to feel less "shitty" and feel like you're helping them, you can do things like offer to review their budget, and so on. They won't take you up on it, but hey, you tried, right?

I have put this out, asking about their budget and cash flow. No response yet, we will see how it goes. I actually would be OK with helping out if I thought the money was going for useful cause, but in reality... I might as well just light it on fire.

[Cassie]

I would no co-sign because if they need one they can't afford whatever they are buying. I have given people $ with no strings attached otherwise it ruins relationships when loans don't get repaid, etc.  You should not feel bad about protecting yourself and your friendship with people.

[kanga1622]

I have only been asked one time to co-sign. I was honest and said our car was on its last legs and we wouldn't be able to get a car loan if her loan was showing on my credit (I was maybe 23 at the time). That was the end of the conversation but she was nice about us listening and giving her a thoughtful response.

She did ask for a small loan at some later date and I gave the money to her knowing in my heart I would never see it and told her as much. In the future this is the only way we'd ever help anyone. I will not ever co-sign for anyone (even my own kids when they are older). I'd rather help them out in other ways but won't take the chance of having a huge loan default and end up my responsibility.

[WildJager]

Thanks, makes me feel much better. Honestly, I'm not sure you can relate to this, but I will think on it nevertheless.

I wasn't trying to hurt your feelings, please dont take it that way. Just saying, as humans, we often mask our feelings. I mean, if youre feling shitty, maybe its for a reason. And maybe you're asking the question here, in hopes that other shitty people can tell you not to feel shitty, mainly because they feel shitty themselves. Or maybe im wrong.

But I do think I can relate. Not sure why you think I cant.

I had poor credit - Had to sign a 9.75% mortgage.

Worked hard to build my credit, and my parents co-signed me on several loans.

Because of them, my credit score is now in the high 700's and I no longer need a co-signer.

This is one of those situations where normal human decency screams, "Help out!  They're family."  But the law means that the person just trying to help can be burnt by loved ones, even if the recipient wasn't trying to do harm.  As numerous examples attest to, this can lead to hurt feelings and cause rifts in an otherwise good relationship.

I am of the mindset that it's not worth the risk to the relationship.  Just as a child who never learns independence because their parents continuously bail them out financially, co-signing for a loan never really enforces the lesson that one must save for what they want.  If this person needed help getting a vehicle or something to get to work, I would consider it more helpful to gift them some cash to buy a used vehicle of their own that they don't need a loan on (for example).  If that's not good enough for them, that's their problem.

[tonysemail]

I co-signed once on a student loan and I would not do it again.
It makes you vulnerable to someone else's bad decision making.
In my case, my buddy betrayed the trust by being irresponsible and making payments late.
It's not like he was cash poor, just young and stupid.
I got harassed by collection department too many times to recall and it really drove me and my wife nuts.
Don't do it and there's no need to feel like an awful person for it.

FWIW I'm constantly having this struggle with my parents.
They are STUPID with money and in the past, I made the mistake of bailing them out with cash.
Last year, I decided to help them with improving their credit score, but I've even soured on that.

[Samsam]

I would no co-sign because if they need one they can't afford whatever they are buying. I have given people $ with no strings attached otherwise it ruins relationships when loans don't get repaid, etc.  You should not feel bad about protecting yourself and your friendship with people.

+1 for this!

[irishbear99]

I mean, if youre feling shitty, maybe its for a reason. And maybe you're asking the question here, in hopes that other shitty people can tell you not to feel shitty, mainly because they feel shitty themselves. Or maybe im wrong.

Or, he could co-sign, risk his family member missing payments and trashing his credit, and feel even shittier.

BTDT. Saying no is the less-shitty option. Trust me.

[Paul der Krake]

There can be elaborate scenarios that I could come up with for justifying co-signing, such as someone with assets but limited cashflow, or a overblown tightening of lending standards due to some crisis.

But an able-bodied person for a consumer loan? Not going to happen.

[elaine amj]

My niece asked us to cosign for her house when she got married. Was a bit surprised to be asked, to be honest. Still, we really didn't think they could afford the nice house they wanted - she worked in a daycare and her husband was in disability. We doubted they would be open to sharing their financial situation and at the end, we just said no. They ended up buying an older, cheaper house. Not sure who helped. 5-6years later, they have recently moved to a brand new house in a nice suburb. Possibly with their mom's help.

I promptly forgot about it after we said no. We didn't see them often and rarely got access to time with their kids (although I would reach out with invites every few months). Thinking back, I wonder how much of it was related to our refusing to co-sign.

Still, I am glad we didn't - I am not privy to their finances but just don't feel comfortable. Plus, we would have been judgy about their spending which is uncomfortable for everyone.


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[lightmyfire]

I co-signed on an ex boyfriend's car loan back when I was young and stupid.  It affected my credit negatively for many years.  I would never do it again, even for close family.  If you need a co-signer, you probably shouldn't be taking out the loan.

[gman]

 After being burned with having to pay back a small school loan for a friend that I co-signed, I decided never again. It was hard at first but we never co-sign or loan family or friends money ever. We tell them we have a great relationship now and don't want to ruin it.  The feeling bad part goes away after a while when you say no enough :-). Now we don't blink when that no rolls off our lips. If we can afford it and we want to, we just gift it but that has been rare. We never have a problem now where a family member or friend will not talk to us because they owe us money.

[okits]

How do you deal with this? Not the saying no part, but the "still feeling like a decent human being" part?

Someone in a different thread said (re: financial handouts), "I do not go to work every day so handout person doesn't have to."  You don't live a life of financial responsibility so someone else doesn't have to be responsible.  If you say "yes" just out of guilt then you are possibly financially harming yourself, and also harming the other person by shielding the asker from the consequences of his/her actions.  Say yes only when you want to.  If you are willing to spend the time and effort to teach the asker how to make better choices (and give ongoing encouragement) then yes, you are a decent human being.

Second possible solution: work on your stealth wealth skills and avoid these requests altogether.

[elaine amj]

Another option is to make a small loan or gift. A few years ago, a friend who had fallen on hard times asked us (and a few other ppl) for a loan so he could buy his own truck (he had gotten into truck driving). I had no idea if it was a valid business and they had a bit of a history of being a wee bit too ambitious. DH didn't wanted to say yes. We talked about it a while and finally decided that as long as we were ok with never being paid back, we would loan the money. Took them a few years but they did eventually pay us back, mostly because the wife finally got a great full time job. I actually don't know if he is still truck driving - I doubt it as it was hard on his body (he's in his 60s and not incredibly healthy). I didn't ask and really tried to avoid knowing about how the truck driving was going.


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[mxt0133]

How do you deal with this? Not the saying no part, but the "still feeling like a decent human being" part?

Basically if it was something I wouldn't do/get myself, buy an expensive car/house/education, I have no problems sleeping well at night with saying no, even if it was my parents or kids.

My MIL asked us to co-sign a mortgage because she lost her job, it was a vacation house being built in another country, so it's not like she was going to be homeless.  I told my wife that the probability of her getting a job at her age again was very unlikely and that we would be responsible for the payments.  We politely declined and when she asked for a loan, I told my wife I was fine with giving it to her but to not expect it back.  Sure enough she had to let the property go and when she sold her house to downsize we still have not seen the money or any mentioned about paying us back.  Even though she keeps buying my youngest SIL a car after the current one keeps getting wrecked.

[Catbert]

Luckily I've been asked to cosign very few times in my life.  (The upside of being a bitch.)  The question  I ask myself is what do I know that the bank doesn't?"  Usually the bank and I know the same thing, i.e. that it's highly questionable that thee bank will get paid back on time meeting all requirements.  That makes it easier to say "no" and still feel good about yourself.

In only one instance recall I knew that the 22 yo had worked his way through college working full-time and going to school full-time,  He had no credit history but was super reasonable about, well, everything.  While I knew that there was no way the bank (in this case landlord) could know. I happily co-signed and didn't get burned.

[BlueHouse]

How do you deal with this? Not the saying no part, but the "still feeling like a decent human being" part?

My brother went through a bankruptcy a few years ago. I helped him out by giving him some cash and by paying some of his bills off (which he has since paid back despite my cries that I wanted him to get back on his feet so no repayment was necessary). But in the middle of the bankruptcy, he took a consulting gig for a few hours a month. He asked me if he could get payment made to my business and then have my business reimburse him. I don't understand fully what he wanted to do, because once it was clear that he was either trying to hide e income, or avoid paying taxes on it, I shut it down.
The most aggravating part was he wouldn't just let it go. He kept saying "you can say no, I just want to understand your reasons". He's my older brother, so we have a long history of him telling me I'm wrong or that my reasons aren't logical or that I'm not analytical enough. So when I gave him the first reason of "I am not going to jeopardize my business so you can save a few dollars on taxes", he said "well that's not logical, I don't think you understand...blah blah blah."  We went another round or two and the next time he said, with a smirk and a condescending laugh, it's okay to say no, I just want to kno..." I cut him off and said "I've said no and I've said it three times now.". He finally backed down.

i have many emotions about the whole exchange. I'm angry that he would ask. Angry that he would put me in a position where I could lose my business if I am involved in some type of fraud. Sad that he doesn't seem to care about my well being enough to worry about he consequences to me. Mad that he still treats me like a child that he can manipulate. Disappointed that it still matters to me that he knows it too. Hurt because he paid back the money I gave him - I really think he insisted on paying me back because he can't stomach the idea of me having something to lord over him. And so sad that he thinks I would do that. 

The whole situation made me think that my brother doesn't like or respect me very much.

[ptgearguy]

How do you deal with this? Not the saying no part, but the "still feeling like a decent human being" part?

My brother went through a bankruptcy a few years ago. I helped him out by giving him some cash and by paying some of his bills off (which he has since paid back despite my cries that I wanted him to get back on his feet so no repayment was necessary). But in the middle of the bankruptcy, he took a consulting gig for a few hours a month. He asked me if he could get payment made to my business and then have my business reimburse him. I don't understand fully what he wanted to do, because once it was clear that he was either trying to hide e income, or avoid paying taxes on it, I shut it down.
The most aggravating part was he wouldn't just let it go. He kept saying "you can say no, I just want to understand your reasons". He's my older brother, so we have a long history of him telling me I'm wrong or that my reasons aren't logical or that I'm not analytical enough. So when I gave him the first reason of "I am not going to jeopardize my business so you can save a few dollars on taxes", he said "well that's not logical, I don't think you understand...blah blah blah."  We went another round or two and the next time he said, with a smirk and a condescending laugh, it's okay to say no, I just want to kno..." I cut him off and said "I've said no and I've said it three times now.". He finally backed down.

i have many emotions about the whole exchange. I'm angry that he would ask. Angry that he would put me in a position where I could lose my business if I am involved in some type of fraud. Sad that he doesn't seem to care about my well being enough to worry about he consequences to me. Mad that he still treats me like a child that he can manipulate. Disappointed that it still matters to me that he knows it too. Hurt because he paid back the money I gave him - I really think he insisted on paying me back because he can't stomach the idea of me having something to lord over him. And so sad that he thinks I would do that. 

The whole situation made me think that my brother doesn't like or respect me very much.

More likely he is ashamed of what he did and wants to try to justify his actions so he can live with himself. My guess is that he has overbearing guild and probably thinks that you think he is pathetic and a piece of garbage, He likely will never forgive himself for screwing up and he probably shouldnt as he ruined the relationship for money.

[Syonyk]

^^ Stealth wealth for the win.

I've been asked to consign once by a family member for an engagement ring. I didn't have the money to cover it if he defaulted and I thought the target of said ring wasn't someone he should marry. He found someone much better. :)

[Gevans17]

how much are we talking about? a used car or big student loans?

[ender]

My brother once asked me to cosign a car loan. I said no, but even then I didn't really know what that would have meant.

Now? Not a chance I'd cosign a loan for him lol!

[Guava]

I only loan one family member money and I never expect to see it again. She is actively trying to fix her financial situation and has had some bad luck and I know that being generous at times with her has greatly improved her situation. In turn, she has always paid me back quickly. My rule with her is never to loan more than $5 though.

I asked my brother to cosign for me years ago when I was trying to buy a house and had light credit. It turned out that I could get approved without him and did. But he would have helped me out a lot and knew I was good for the money.

[Metric Mouse]

"I'd LOVE to co-sign for you. Unfortunately I'm in Boka right now. And after that I'm getting dragged to Cebu... soo.... yeah, good luck with that thing."

FIRE is powerful stuff.

[jim555]

NEVER CO-SIGN A LOAN!  Period.

[prognastat]

Very circumstantial scenario but if it's sensible, reasonable, and continues your bloodline, why not? I've got a max of 50 years left to live and then the universe will continue on for an infinite amount of time; money is ultimately a very silly and futile game we specks of sand play.

It's pretty rare for a loan to continue your bloodline though and I would say a lot of people here would consider most loans the average american takes out unreasonable an non sensible.

[smartierthanthou]

I definitely understand the pressure family can exert on financial issues.
 
I have a sister who has made several choices, mainly dropping out of school to work another job to support a high-school dropout who does not work. Married said overacheiver at 22. Decided that working is hard and paying rent is for stupid people, so left a decent paying low skilled administrative job to 'nomad', Ie: couchsurf, usually at friend's homes who are 'stupidly' paying rent, or poor relatives in Section 8 housing (Benefits that could be lost with two people not allowed to live there long term. Thanks for taking on risk for me, Grandma!) She regularly asks for handouts from members of my family - car insurance payments, gas cards, small amounts of money for food, car repairs, a used car, "That you don't need anymore." Ect.
 The relationship is strained whenever any of these choices are questioned and if you are responsible finiancially and don't wish to enable this scenario, you are a souless zombie with no soul or appreciation for 'art'. Basically, it's fine for me to work for money, as long as I share without question, but they are elevated and enlightened beings who are above such things. Money is for wage slaves, the universe provides me with abundance...blah blah blah!

On husboo's side, he has a *very* irresponsible and grandiose father that's has been bailed out with over 30,000 US over the years (lives in a country with a very favorable exchange rate), fled a different country to avoid debtor's prison, likes grand and expensive parties and events that he can't afford and puts intense pressure on his two sons who are just getting established to fund them.
Wants to start a glamorous restaurant instead of expanding with profits. Unknown profits, that is, but you should invest on the ground floor for 40,000 without seeing a balance sheet that isn't napkin math and doesn't know his losses/profits or labor costs. Bank won't approve a loan and we would qualify for a lower interest rate. How dare you question me about how much debt I have! His only problem in life is that no one has ever believed or supported him.

My general rule of thumb has been to give without condition only if I can do so without wanting to get involved in their life choices. Which, for these individuals, is almost impossible considering the amount of history and actual money that has disappeared and not really changed anything.

I have offered to pay a year of interest for a loan that they sign for to start a business to both of them. Neither took me up on that, even though the interest would be around 14.9% for an unsecured loan with awful credit.

I did help a brother with a downpayment for a rental property and one years worth of textbooks for another brother, but that worked out just fine. Only put as much effort into helping improve a situation as they are, otherwise the momentum and risk is all on you.

[LouLou]

I co-signed a lease for a relative once and it was a huge mistake.

She lost her job during the lease and couldn't make a rent payment.  Told me about it at the last minute, even though I was a guarantor.  I was so stressed thinking about how to pull together the rent.  We met to discuss how much she needed, how we were going to deal with the rent for the next few months, etc.  During that conversation, she let is slip that she had just gotten her nails done. AFTER she told me she need tons of money.  I was furious and hurt.  Not so much about the money, but about the fact that her need for instant gratification was more important than how the situation affected me.

Serious damage was done to our relationship.  If I had not co-signed, the worst that could have happened was that she would get evicted and live with me (renting a room for cash or help around the house).

I will never co-sign or give a loan to anyone ever again.  The risk for ruining the relationship is too high.  Instead, I just give or do nothing depending on the relationship.  (For example, some folks I know suffered a layoff right after they had a baby.  I bought them hundreds of dollars worth of diapers and would do it again it a heartbeat.  They can "pay me back" by loving their baby and finding new employment).

[Brawndo TQ]

I would only ever cosign for my kids or my parents (but my parents would never need it).

I would offer to give cash if someone asked me to cosign.

[gman]

Another thing we did to keep from feeling bad about having to say no was to offer family a way of earning the money they were requesting. We would find jobs around the house like painting, helping out in the garden, scanning photos..etc. We did hear back from another family that one of the family members we were doing this with said that we were holding money over their heads.  WTF.  How is providing you a way to earn the money so that you don't have to pay it back holding it over your heads ? It's my money. I had to earn it.

[Sibley]

How do you deal with this? Not the saying no part, but the "still feeling like a decent human being" part?

My brother went through a bankruptcy a few years ago. I helped him out by giving him some cash and by paying some of his bills off (which he has since paid back despite my cries that I wanted him to get back on his feet so no repayment was necessary). But in the middle of the bankruptcy, he took a consulting gig for a few hours a month. He asked me if he could get payment made to my business and then have my business reimburse him. I don't understand fully what he wanted to do, because once it was clear that he was either trying to hide e income, or avoid paying taxes on it, I shut it down.
The most aggravating part was he wouldn't just let it go. He kept saying "you can say no, I just want to understand your reasons". He's my older brother, so we have a long history of him telling me I'm wrong or that my reasons aren't logical or that I'm not analytical enough. So when I gave him the first reason of "I am not going to jeopardize my business so you can save a few dollars on taxes", he said "well that's not logical, I don't think you understand...blah blah blah."  We went another round or two and the next time he said, with a smirk and a condescending laugh, it's okay to say no, I just want to kno..." I cut him off and said "I've said no and I've said it three times now.". He finally backed down.

i have many emotions about the whole exchange. I'm angry that he would ask. Angry that he would put me in a position where I could lose my business if I am involved in some type of fraud. Sad that he doesn't seem to care about my well being enough to worry about he consequences to me. Mad that he still treats me like a child that he can manipulate. Disappointed that it still matters to me that he knows it too. Hurt because he paid back the money I gave him - I really think he insisted on paying me back because he can't stomach the idea of me having something to lord over him. And so sad that he thinks I would do that. 

The whole situation made me think that my brother doesn't like or respect me very much.

More likely he is ashamed of what he did and wants to try to justify his actions so he can live with himself. My guess is that he has overbearing guild and probably thinks that you think he is pathetic and a piece of garbage, He likely will never forgive himself for screwing up and he probably shouldnt as he ruined the relationship for money.

My uncle and dad were in business together when I was a kid. Uncle wanted out, and while I've never figured out exactly what happened, there was fraud and lawsuits involved. Ever since then, and it's been about 20 years, my immediate family is somewhat excluded by him and his wife. I'm assuming that they're ashamed of what happened and choose to blame my dad. As far as I've figured out, my uncle was the one at fault.

Since I have physical control of all the family albums, pictures, etc - I've got my fairly petty revenge. I'll share copies when I feel like it. I'm keeping the originals. Would it be nice if things would get better? Yeah. But at the same time, I'm ok without my unethical alcoholic uncle around.

[Freedom2016]

Here is a counter example from two people who read MMM regularly.

My sister is co-signing the mortgage on our new house which is 1.9 miles from hers (we're moving about 20 miles closer, into a better school district, and out of a condo into a 1500 sqft SFH on 1.2 acres). On the merits, we have the income to qualify for the mortgage on our own, BUT because I left my consulting company in December, I am now newly considered self-employed by lenders who think I have no income track record. It's silly because I was effectively self-employed within my firm (basically a collection of partners who ran their own business units) and I have consistently earned good money for 8 years but that's just now how banks see it. In fact I've already booked enough work in 2016 to qualify for the 80% mortgage amount we need, but whatever. They want to see a full year's income in my "new" status before they will lend.

I introduced my sister to MMM last year, and upon hearing our mortgage dilemma, she offered to co-sign for us. When I gasped and said that she should NEVER COSIGN FOR ANYBODY DON'T YOU KNOW THAT she said "yeah, I get it, but your move is pretty Mustachian and I know you and I know your income and I don't feel I'm taking much of a risk" and when we talked more we agreed after talking w/ mortgage broker that after DH and I have made 12 mortgage pmts on the cosigned loan, I will have a year track record as "self-employed" and we will then refi to get her off the loan. We're probably going to load up a savings account with 12 mo of mortgage payments, auto-send the monthly checks, and forget it til it's time to refi.

(To those who wonder - why don't you stay put for another year and avoid the cosign thing altogether as well as double financing costs - I say yes, very good idea which we were planning to do. AND we have always planned to move out to her area so I have watched real estate listings there for 2 years. The right house in the right location at the right price came on the market last month (a listing she sent me) and we decided it was time to make the jump and even with the added refi costs it is still worth it.)

So. Co signing is still a really bad idea. Unless - perhaps - if you're in a circumstance like mine that isn't about not having the money or not being responsible with money.

[BFGirl]

I've been taken advantage of by friends several times who needed money that I loaned to them.  One was for a business venture and I lost $15K on that one.  Now I only "loan" money with the expectation of not being paid back.  If I am not comfortable losing that sum of money, then I will say no.

[charis]

I asked my mother to co-sign a smallish student loan to complete testing for a professional license at the end of graduate school.  She was initially hesitant, which I will admit hurt a bit since I was in the top of my class during my last year and had a great job starting three months after graduation.   Also, she had provided regular guilt trips while I was in school for not asking them for money - completely illogical!  But she agreed and never mentioned it again.  I'm not sure she even realizes that I paid it off a while ago.

But if someone approached me to cosign a loan now (except my own children), I would mumble something about bad credit and squirm out in some cowardly fashion :)

[zinethstache]

Ditto other posters who instead of co-signing, will give the $$ and not expect it back.

We did this for my SIL - created the amortization table and voila, she DID pay it back.

Because to us it was a gift, it made the transaction way less stressful, and could not ruin our credit.

Do NOT co-sign for anyone. You just don't know what might happen to them even if they are the nicest, most responsible people you know...

[RunningWithScissors]

While there may be exceptions, I never co-sign loans but will consider 'gifts' if merited.  It's taken many years but I've shaken off the FOG (fear, obligation, guilt) that some family and friends use to manipulate me.  It takes practice, but saying 'No' gets easier, and more guilt-free!

Ditto for kids selling chocolates/cookies at the door, FB friends promoting their MLM businesses and co-workers who want a spendy friend to support their own spendy habits.  Nope.  Nope.  Nope.

[BuzzardsBay]

"I had poor credit - Had to sign a 9.75% mortgage."

Two things:

1.  You didn't have to - you chose to.  You could have waited and rented until your credit improved.

2.  If a lender won't lend without a co-signer it's because they've determined the person is a credit risk.  That means there's a good chance they won't pay the loan back.
     Not necessarily because they don't want to, but because they don't have the financial means to.  Why would the co-signer think otherwise? 
     I'm not risking my hard work signing for someone who is probably going to stick me with the loan.  If it's really that important and I really want to help I would rather
     just give the person some money and call it a gift.

[Ramblin' Ma'am]

Co-sign: No, because if the person doesn't pay, the creditors will be after you.

Loan: Maybe---if it wasn't a huge amount and if I'd be OK with never getting it back. But I might be more likely to make it a gift in that case.

[BigHaus89]

My mom cosigned for my student loans to get my electrical engineering degree. Obviously, it paid off well.

I would no cosign a loan for anyone, but would be willing to loan money at a decent rate with a notarized loan agreement.

[Kaspian]

Oh, no--hell, fuckity no on co-signing.  You haven't been responsible thus far but I trust you will with me?  I've printed this out and handed it to people before.  I'm not enabling somebody elses' borrowing.  Tough love, baby.  I'm thinking of having it laminated.

http://lenpenzo.com/blog/id15845-dear-friend-here-are-41-reasons-why-im-not-lending-you-the-money.html

[lauraah]

When I was in college (on scholarship) and working a part time job, I went through 2 crappy ($500ish) cars that lasted briefly and than failed.  My brother-in-law then cosigned a loan for me on a used, but reliable car.  I never had a late payment and paid it off years early.  I am extremely grateful that he did as it put me in a far more secure position to have reliable transportation (and helped build my credit).

I think it comes down to knowing the person and the situation.  If you trust them and the request is reasonable, I don't see an issue.  But I can see how that would be dangerous if your trust gets betrayed.  There are a few people I would cosign for with very little hesitation and many I would outright say no to.  I say it's a case by case thing.  Use your judgment.

[BTDretire]

Anyone else ever get picked on for being the financially conservative/responsible person? As in other people ask for money or ask for you to co-sign on some ridiculous loan, etc...? Happens to me a fair bit and while I do the smart thing and say no, it makes me feel like a shitty person sometimes.

How do you deal with this? Not the saying no part, but the "still feeling like a decent human being" part?

  Tell them this little story. A famous news/talk/political show host, cosigned a student loan for
for a young lady. She subsequently died, he has been getting letters for repayment from collection agencies for years.
  He refuses to pay. He doesn't seem to understand what a cosigner is all about. B_b's four other cohosts were appalled when he mentioned this lack of not paying on air. The guy has plenty of money, he's just a jerk. You're not, you would pay it back, so you don't want the responsibility.
   They are asking you to be the responsible one, they should be the ones trying to "still feel like a decent human being" 
 Do they have anything for collateral, see if they are willing to put it at risk. Probably not, so why should you put your money at risk. (they pay the lawyer to write the collateral agreement.
  You might get to think about what a decent human being you are, every time you make the payment on that loan.
  Don't do it and don't feel guilty about it.
Son or daughter are different.