Would you co-sign or lend money to a family member?

[Anonymous]

Nope but I already have and REGRET it!!
I co-signed on a loan for my sister when she graduated ($8000) for her graduate studies. Well, she graduated, got pregnant with twins, married a man who she NEVER would have otherwise and defaulted on the loan immediately. This was alll at the same time i was pregnant with our first (I cosigned when i was single yet); moving into a new house and starting a new job in a new city my my husband. STRESSFUL and to make it worse my sister didn't give an EFF about it.
She never did pay, the bank came after me, i just paid the thing off with money i had saved up for the nursery. DH and I fought about what a dumb move it was to cosign for her.
In my defense at the time she was a straight A student; no boyfriend (casually dated good guys) and was working. That next semester she met a guy who had no job, no education etc. Now they have 5 kids and live with his mom. They have no bills (his mom babysits) so no idea why, but she has never even offered to pay me back any of it. To say I am a bit bitter about the entire thing would be an understatment.

[Anonymous]

Co-signing a lease or a mortgage is really tricky. Depends so much on the person. Giving a loan directly is not hard for me but I never loan more than I am prepared to lose if it's not paid back - so kind of like a gift, as people above have mentioned.

[Anonymous]

I would give what I could afford but would not cosign a loan. Even with someone I completely trusted. They could lose their job or something else out of their control could happen. Could ruin you financially or ruin your credit.

[Anonymous]

Make it a gift not a loan.

[Anonymous]

It would depend on the family member.
My aunt in another country co-signed a 5-yr private student loan for me in 2014. (She offered, I didn't ask, and I needed to list someone.) I never missed a payment and the loan was paid off last fall. I had actually forgotten she co-signed it until the organization sent me back the original paperwork, stamped "completed."

[Anonymous]

No never. Neither side of the family.

There are many private loan options that are not large or small banks, try peer to peer lending.

If I did ever give a short term loan to an adult kid I would charge the same terms and have a legal doc.

[Anonymous]

Who is asking? Op, if this is just speculation, it's a waste of everyone's time. What matters are the details.

[Anonymous]

Anonymous wrote:Under what circumstances would you either co-sign or give/loan money to a family member (who is not your child)?

I am asking because our nanny needed me to verify her income because she is co-signing for a niece’s mortgage. I was like, ooh, are you sure you want to do that? I think she thought I was crazy to be concerned. She said she has done it before when niece needed to buy a car and it all worked out.

So, I am wondering if I am too stingy. For my own kids, I would likely co-sign or help, but probably not beyond them. I would always help family (parents, siblings, nieces/nephews) in an emergency but it would be a gift within the amount I can reasonably afford, except for life/death things. Then I would do whatever I could. But I would never co-sign for a niece’s mortgage. I have floated family members when they needed to buy and sell at the same time and they needed cash for a short amount of time until they could sell the old house.

Maybe I have a very US view of this and we are too independent? Interested to hear what others think.

Dumb move by the nanny.

Hope you are paying w-2s. Nannying is not a long term stable job so unclear what a broker would think of it.

Our nanny did all kids of dumb stuff with her money so we just stayed out of it.

[Anonymous]

Anonymous wrote:Interesting that you mention that you have a US-based perspective on this. I wonder if other countries have the same issues with credit? Is it as bad for somebody in other countries if they have bad credit?

Many cultures have lots of strings attached and IOUs going every which way. Enjoy!

[Anonymous]

From reading all responses it looks to me like those from immigrant families routinely help each other out, in major and minor ways financially, and no one has mentioned that anyone who did that was burned by the person who got the loan or cosign.

Americans, on the other hand, are much more cautious because it seems that it is common for those who receive the loans or co-signs might not pay the loan payments or pay back the money or might ruin the cosigners credit.

Makes me say....hmmmmm.

[Anonymous]

I'm sure immigrant families have had people burn them, but there is also the culture of serious public shaming within most immigrant communities if someone defaults like that.

[Anonymous]

Anonymous wrote:From reading all responses it looks to me like those from immigrant families routinely help each other out, in major and minor ways financially, and no one has mentioned that anyone who did that was burned by the person who got the loan or cosign.

Americans, on the other hand, are much more cautious because it seems that it is common for those who receive the loans or co-signs might not pay the loan payments or pay back the money or might ruin the cosigners credit.

Makes me say....hmmmmm.

This is just my experience growing up in the Rust Belt but I am very cautious co-signing for family. Credit is usually so easy to obtain that the cousin asking you to co-sign is usually trouble and likely to default. Basically, the only extended family members who ask you to co-sign are a hot mess and not worth the risk.

[Anonymous]

You left out the amount of the mortgage. It might be $200k and the nice might have $100k down and still not get a mortgage. She might be able to live with her niece nearly rent free. She might owe her family a favor or money. So much more to consider.

[Anonymous]

Nope. Never. That’s how you ruin relationships. I would give the money with no strings attached.

[Anonymous]

Depends. Probably not co-sign anything over 5K because unless you had a joint account with the person, how would you know if they're making payments until it's too late, and also I would want to reserve that credit for myself should I need it.