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The act of co-signing involves a promise to pay another person's debt arising out of contract if that person fails to do so. Many realtors and landlords require a cosigner for college students, people with bad credit or people whose income is less than a certain, low multiple of the amount of rent. Other loans typically involving a cosigner are motor vehicle purchase, money loans and mortgages. The statute of frauds existing in most states of the United States requires that any such agreement be in writing and signed by the co-signer in order to be enforceable in a court of law. The legal act or instrument of cosigning is also called a guaranty.
Co-signing a promissory note, in particular, may entail significant financial risk for the co-signer or guarantor.[1]
A co-signer is a person who is the guarantor of the contract, especially a promissory note.[2] A cosigner is also known as a surety.
A co-maker is a person who co-signs a check or other draft.
See also
References
- ^ Robert D. Gifford, Co-signing A Loan Is Risky Business, Fall 2005, Military Money, found at Military Money web site. Accessed January 4, 2008.
- ^ Title Insurance USA web site. Accessed January 4, 2008.
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