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My dad just call me and asked me to co-sign for his HELOC

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Originally posted by: v1001
It's nice that you are helping your family. But are you really? I mean without knowing all the details it sounds like a lot of potential for them to lose everything and then bring you down too. Their business is not doing good and failing. So they are taking more money out to start another one that may also fail? What if they end up just using a lot of this loan money to make payments on the current business to keep from going under. They should have the first business sold before moving onto the next. This is the trap that a lot of people get into. They figure they can just jump into something else and pour more money into it to get them out. They figure it's a sure thing and they can repay everyone back when it just works out. It's like the same as the gambling mentality that crashes them. I think the best thing to do is get that first place sold first thing. Then move on after that and help them.

I just saw this same thing happen to a friend of mine. He wanted to be a good guy and help out family. Luckily he just gave them cash and didn't sign anything. They wanted to flip a house. They thought it was a sure thing. Turns out they blew all their money and got to extended. Now they are going to go bankrupt and be in debt still. And my buddy can kiss his money goodbye. He'll never see it. Really really lucky he didn't co-sign anything. It's nice to help out but it doesn't mean it's the best thing for them. Now they will probably have a strained relationship on top of that. there is a reason that the banks do not want to give them a loan. They did all the math they know the history of these type of situations.
Click to expand...

The OPs situation sounds a little different though. Flipping houses is motivated by greed and hopes to make a quick buck. I'm sure your friend's family would have done fine had they not gone into that business.

Here, it sounds like the OP's parents are just going through a rough patch and need some help pulling through. From what's been told to us so far, it sounds like they'd do their damnedest to not hurt their son's financial standing in any way.

Worst case scenario.. his credit gets hit for 7 years. I would risk that to help my family
 
The other factor for you to consider is that by co-signing for your parent's loan, you are reducing your available credit. If you intend to buy a house or car in the near future, your ability to get a loan and certainly the rate that you qualify for may be impacted by the loan with your parents.
 
My parents can come to me and say, "I need $xxx, no questions asked" and I would do whatever it took to get them the money.
 
I come from a close-knit family as well. I would never get financially involved in any way (unless they were dying or homeless) with anyone in my family. It can breed bad relations. I've seen it first hand.

🙂
 
Originally posted by: puffff
Originally posted by: v1001
It's nice that you are helping your family. But are you really? I mean without knowing all the details it sounds like a lot of potential for them to lose everything and then bring you down too. Their business is not doing good and failing. So they are taking more money out to start another one that may also fail? What if they end up just using a lot of this loan money to make payments on the current business to keep from going under. They should have the first business sold before moving onto the next. This is the trap that a lot of people get into. They figure they can just jump into something else and pour more money into it to get them out. They figure it's a sure thing and they can repay everyone back when it just works out. It's like the same as the gambling mentality that crashes them. I think the best thing to do is get that first place sold first thing. Then move on after that and help them.

I just saw this same thing happen to a friend of mine. He wanted to be a good guy and help out family. Luckily he just gave them cash and didn't sign anything. They wanted to flip a house. They thought it was a sure thing. Turns out they blew all their money and got to extended. Now they are going to go bankrupt and be in debt still. And my buddy can kiss his money goodbye. He'll never see it. Really really lucky he didn't co-sign anything. It's nice to help out but it doesn't mean it's the best thing for them. Now they will probably have a strained relationship on top of that. there is a reason that the banks do not want to give them a loan. They did all the math they know the history of these type of situations.
Click to expand...

The OPs situation sounds a little different though. Flipping houses is motivated by greed and hopes to make a quick buck. I'm sure your friend's family would have done fine had they not gone into that business.

Here, it sounds like the OP's parents are just going through a rough patch and need some help pulling through. From what's been told to us so far, it sounds like they'd do their damnedest to not hurt their son's financial standing in any way.

Worst case scenario.. his credit gets hit for 7 years. I would risk that to help my family
Click to expand...

That may not be true. Since the house was HELOC, the home loan term changed from non-recourse loan to recourse loan (atleast in Cali) which means the bank can go after your personal asset if the house goes into forclosure.

 
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