Considering being Guarantor on son's financing of mortgage loan.

[alang]

My son and his wife are looking into purchasing a residential home. My son works in the trades (Welder). In his initial queries about financing, he has been told he should seek a co-signer because most of his wage reporting is via 1099's.

He has asked me if I would co-sign. My wife and I worked hard to maintain our outstanding credit rating (790). I may consider being a guarantor, but would like some type of consideration should something happen and the bank forecloses (e.g. ability to take posession of property if I assume payments).

Is it possible to have some type of pre-arranged novation (I think it may be called expromissio) where I take over the loan and get "title" to the property?

 

[army judge]

Here's a better remedy, YOU buy the property and arrange the mortgage in YOUR name.
Then, you have him sign a land contract to make payments to you.
Talk to your lawyer about such an arrangement.
It is far less complicated and far more secure for you!!!

 

[fredrikklaw]

Suretyship!

ALANG:

Novation is a creditor contractual remedy that comes into play only after the contract has been formed, one form of which (3 forms of Novation) allows a person to step in and assume the debt of another (called the Principal) and hence become an Expromissio (or Expromissor). Therefore by its very nature, it is not something that can be "pre-arranged."

For what you have in mind, you will have to enter an arrangement called a Contract of Suretyship wherein you become the Surety of the principal and will assume his obligation under the contract in case he is unable to perform the terms of that particular contract, but will also have right of Subrogation to possession. But for that right to be enforceable, you should first have some manner of right (share, parcel, percentage) to the property, and the surety agreement should be recorded and signed by you and your son in compliance of Statutes of Fraud.