Have you been asked by a close family member of friend to co-sign on a mortgage for a home in Albuquerque? If you decide to be a co-signer, that's a great way of helping someone get into their first home. But there are some things about co-signing that you should consider before you proceed.

One of the most important things to think about is if the person you co-signed for defaults on the loan. The point of co-signing is that there will be a backup if the primary loan holder defaults on the loan. Payments can be up to 60 days late before a lender forecloses on the property. As the co-signer, you won't typically know about late payments until things get bad. A good idea to avoid surprises is to get copies of the monthly statements and monitor them.

Your credit score is another factor in co-signing. The payments made by the primary loan signer actually show up on your credit report as if you made them. That's a good thing if those payments are timely. But as you can guess, if those payments are late or default, then this will affect your credit adversely.

Co-signing on a loan also affects your credit balance. The new payment, even though it's being made by the primary signer, will still be adding to your own debt. So if you plan on buying a home in Albuquerque yourself any time soon, you need to factor in the debt amount added by co-signing on another home as it could keep you getting approved for your own home mortgage.

As you can see, there are certain risks involved when co-signing a mortgage. What's a good way to help someone buy their first home in Albuquerque without co-signing?

If you have enough cash on hand, you can offer to help gifting the money toward the home purchase. This will lower the amount they need to get the mortgage for, and make it easier for them to qualify. Gifting money also means you aren't attached to a loan for decades, possibly affecting your credit for all that time.

Another point to consider about co-signing us that it won't help if either of you have bad credit. Lenders usually use the lowest credit score of all the borrowers. That means if you have a high credit score, it won't help the primary borrower if they have a bad score.

Co-signing on a loan to help someone buy a home in Albuquerque can be a good thing, as long as you weigh the risks with the benefits.