Dear Dave,
My sister has bad credit due to a lot of late payments. She has finally started to change her ways and get control of her finances, because she and her fiancé want to make an offer on a house. The bank won’t approve it if she is on the loan, and his income alone isn’t enough to get the amount they need. His parents are well-off, and they have offered to co-sign on the loan. Is this a bad idea?
Rhonda
Dear Rhonda,
It’s a really bad idea. Those two have no business thinking about a house right now, and his parents are about to make things even worse with their loving, misguided help.
If you need a co-signer, you’re nowhere near ready to buy a home. They need to slow down. I mean, they’re just engaged. They don’t even need a house at this point. They should get married, live in a cheap apartment for a while, and work on paying off their debts. After that, they need to save up an emergency fund of three to six months of expenses, then start setting cash aside for a huge down payment on their first, modest home.
These two have a bad case of house fever. And mom and dad need to step back, look at things objectively, and realize they would not be blessing these kids by helping get them into a home they obviously can’t afford!
—Dave