Thanks alicias for pointing that out, makes much more sense now.
@Sk8lyn23 wrote:
I agree that this thread is still very helpful. I am currently looking to purchase a home/condo possibly with my boyfriend. I am not sure what the proper actions would be to make sure that this never happens to me. My boyfriend suggested that we get a noterized statement saying that debt and ownership is 50/50. That seems to cover the issues of being left to pay the debt on our own, or being left with nothing after helping pay it off, or at least that is what I am hoping it would do. Basically, what I am currious about is what steps can i take now to prevent the above situation? Will a noterized statement of equal ownership really help our situation? We both really want to purchase a place to call our own, but are not ready for marriage. I would love to purchase on my own, but I'm not sure if I would qualify by myself. Any imput would be helpful. =)
Sk8lyn, the OP's situation is that they co-signed on a mortgage together and one didn't realize a mortgage they were on was past due. It sounds like you are asking about something else, which I'll touch on in a moment, but the easy way to rectify that situation, assuming you are together, is before you buy, set up a budget so you know what you can comfortably afford for your lifestyle & plans, then set up payment reminders before the mortgage is due. Even though I don't have any blemishes on my credit I was pretty bad at making my payments on time, usually making it a day or two before it went 30 days late, and then I went ahead and set up reminders on all of my payments (house, car, credit cards, and utility bills even) and I feel much more comfortable about my finances.
Now if you are no longer together and have gone your own ways, with the other person living in the home with a mortgage that you co-signed on it, you have two choices. You can either try to have the person who is remaining in the home refinance it solely in their name (which assumes they'd be able to qualify, not something that should be assumed in today's lending environment) or a novation, or novation agreement, but it is up to the lender if they will agree for that to happen. A novation agreement essentially states you agree to take the place of another party in a contract/mortgage. They go hand in hand when someone assumes a mortgage, so usually the requirements for a novation is for the remaining person to still be able to qualify for the mortgage on their own.
If you are separated, not in the home, are still on the co-signed mortgage, and it goes late... I don't believe there is any document that could be signed between you and your boyfriend that would relieve you from having the late payments being reported to your credit. That document would be a good start if you ever had to go to court against your boyfriend (guess he'd then be your ex-boyfriend).
Edited to add: as far as you qualifying on your own, it'd be best to start a new thread on that so we can stick to the topic in this one.
Message Edited by ShanetheMortgageMan on 02-03-2009 10:32 AM
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