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5 reasons to get a new mortgage in 2012

Helping a family member buy a home
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Helping a family member buy a home

Co-signing a loan to help a family member buy a home might sound like a feel-good proposition. But those warm fuzzies are the only benefit that co-signing a loan offers.

From a purely financial point of view, co-signing someone else's debt is a bad bargain.

"I see no reason why anyone should co-sign on anything for anyone, unless it's a relative, because you're putting yourself in a position to jeopardize your credit," Lopatin says. "I don't recommend it, unless there are extenuating circumstances."

Miller also says being a co-signer involves "more negatives than positives" because the co-signer is equally responsible for the loan. If the borrower fails to make the payments, the co-signer is on the hook.


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