Dave Says: Co-Signer Wants Out of Loan

Dear Dave,
I tried to be a good son and co-sign on a home loan for my mom because her credit isn’t very good. The loan was at a high-interest rate, but the loan officer we spoke with said that even if things went bad it wouldn’t go against my credit. Right now, I’m trying to save up the money to buy my own home. Is there any way to get my name off this loan? My younger brother still lives with her. He has a good job, good credit and said he’d co-sign if that’s possible.
-- Anthony

Dear Anthony,
First of all, the loan officer you spoke with is wrong. If this loan went bad it would definitely count against your ability to get a house because you have a contingent liability on your mom’s loan.

I’d look at paying back a chunk of this loan if possible, and then help your mom try to refinance at a lower interest rate. But don’t have your brother co-sign, or he’ll just inherit your mess!

Your mom will be paying less money to the mortgage company every month, and you’ll have the monkey off YOUR back so you can go and buy the house you want.
-- Dave