Huge Co-Signing Mistake
Sheila is calling because her husband co-signed for their son's student loan debt. It's at $150,000, and he's about to graduate. Should they pay these loans off themselves or pay extra on their mortgage?
QUESTION: Sheila in Ohio is calling because her husband co-signed for their son’s student loan debt. It’s at $150,000, and he’s about to graduate. Sheila’s household income is about $85,000 a year. Should they pay these loans off themselves or pay extra on their mortgage?
ANSWER: I would start squirrelling money very fast and pile it up as high as you can. If one of these kids misses a beat, you start writing checks. That co-signing is just like signing. It’s your note. They are going to sue your butt if you don’t pay it. You could end up with this whole thing wrapped around your neck pretty easily. It wouldn’t be an unusual story for you to end up with the whole thing.
I would not pay extra on the mortgage until I had the equivalent of the student loan in savings. Be prepared to pay everything off if one of these kids hits the wall on something. You could get yourself in a real mess.