Having a cosigner on your home loan is a great way to establish credit. Mortgage lenders are likely to give you better rates and a larger loan when multiple parties are accountable. The loan becomes both parties’ responsibility until it’s paid in full. Since cosigning is generally an act of kindness, it’s crucial to pay on time. Payment in full will ensure neither party receives derogatory marks on their credit report.
If the primary borrower improves their creditworthiness, they may have the option to refinance the loan in their name, relinquishing the cosigner’s responsibility. When a loan is consistently paid on time, cosigning is a great way to boost both parties’ credit scores.
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