Robin Friedman
speaker
175 appearances
4 recordings
1 series
first heard Aug 2017
last heard Feb 2024
Robin Friedman’s voice in public audio — every appearance, attributed to the second.
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Appearances
WSJ Your Money Briefing · Cosigning a Mortgage: What Children and Parents Need to Know · 4 Oct 2022
podcast
Sure,
Bidding wars may not be going on right now, but prices remain high, and with mortgage rates now hovering around the 7% mark, owning a home is much more expensive today than it was a year ago.
For buyers who don't have an adequate employment or credit history, like a recent college graduate or someone who's self-employed, a parent co-signing can make the difference between getting into their dream home or not.
When a parent is a co-borrower, the mortgage lender simply adds up the assets and income of both parent and child, as well as the debts of all the parties.
So if a parent has substantial assets and income, that can tip the scales for a child who doesn't.
Sitting down with your parents to discuss finances could be uncomfortable, but it's really important to make sure that everyone is on the same page and has the same expectations.
Parents may also want to consider the impact on their other children.
What happens if they co-sign for one?
Will the other kids expect them to do the same thing?
It's also essential that both parents be on board about co-signing.
Spouses often disagree when it comes to lending money or giving gifts to children or grandchildren.
So to avoid conflict, all of this needs to be hashed out in advance.
The age of the parents is really important too.
Many parents considering co-signing for their kids are approaching retirement age, a time that usually they'll be living on a fixed income.
Co-signing a mortgage means that if the children stop paying, the parents might be in for a rude awakening when they become liable for paying that mortgage.
They may have to cut back on travel or other spending or may even have to pull money out of their own home to get by.
It's risky.
Well, if parents cosign a loan for their children, that doesn't exactly scream financially independent.
Parents may be enabling their children to live outside their means, and that's never a good thing.
Parents can structure the deal so that they are co-investors or co-owners in the property rather than just passive co-borrowers.
Showing 61–80 of 175 · page 4 of 9
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