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What does co-signing mean?

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So, you’ve been asked by your kids, or close friend, to co-sign for them. While you care for them deeply and wish to help, there are certainly some items to consider before lending your autograph. We’ll break it down for you today, but always remember to consult a financial professional before making big decisions!


Sometimes when someone goes to apply for a loan, they don’t have the strong financial background to qualify. But there is a way around this with something known as a co-signer. A co-signer can put their name on the loan to help strengthen the application. There are some serious responsibilities and impacts that come with co-signing that you should be familiar with.

Who can co-sign?

First, not anyone can co-sign. The banks want to ensure that if the borrower (with a poor credit score or no existing credit) defaults that they will be paid. That means that if they miss their payment, you’re on the hook for paying. And if that happens, it will negatively impact your credit score. Co-signing for someone also impacts your own borrowing power, since you are adding their debt to yours.

How to protect yourself

There are some steps that you can take to help protect yourself if you decide to move forward with co-signing. Today’s technology makes it easy to get text and email notifications on when a payment is coming due, completed, and missed. Ask to be added to those notifications for your own peace of mind.

Additionally, there are steps such as getting your name on the title of the property. Simply put, this gives you the power to sell the home if the borrower isn’t able to pay their mortgage. As always, reach out to us if you need a recommended professional.


Financial items aside, you may find your relationship damaged if things go south. Saying “no” upfront may damage your relationship as well, so just be sure you’re clear is reasonings of why you’ve chosen to not move forward. Express that while you trust them often times there are factors outside of someone’s control that could result in them not being able to pay their finances.

The Wolf Team

We hope today’s post has helped guide you in making the right decision for you and your loved one. As always, let us know if you need help getting connected to a finance professional or simply just to say hello. You can reach us at 858-722-6847 or use our contact form.

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