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Every now and then, a caller drops a scenario that even The Ramsey Show hosts struggle to believe.
That’s what happened when Jeremy, a 22-year-old college student from Dallas, phoned in with a plan he thought might help him skip renting and jump straight into homeownership (1). Jeremy is graduating with no student debt, has $50,000 saved and just secured a job in Tennessee with a $65,000 salary, $10,000 stipend and even a free company vehicle.
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By any measure, he’s starting his adult life far ahead of most young workers. But Jeremy admitted he was scared of renting — partly because his dad always told him rent is a “waste of money” — and that fear appears to have set the stage for a troubling workaround.
As he explained to hosts George Kamel and Ken Coleman, Jeremy is considering having his girlfriend’s mother cosign the mortgage on his first home, a plan that left the hosts in absolute shock.
“Ok, Jeremy, this entire call you have sounded like somebody who’s way ahead of the game and on top of it, and then you just threw the ultimate curveball,” said Coleman. “You’re considering buying a house with your girlfriend’s mom?”
Jeremy’s plan hinges on two factors: he doesn’t want to rent, and he isn’t sure he’d qualify for a home loan on his own. With this in mind, his ill-advised solution is to lean on his girlfriend’s mom, someone he isn’t related to, engaged to, or financially tied to.
Kamel immediately flagged the main issue with Jeremy’s plan.
“You’re going to call us in a year … ‘I sunk all of my money into buying a house with my girlfriend’s mom and we just broke up. What do I do?’” said Kamel. “Do you see where this is going? It’s going to get messy real quick.”
As the hosts explained, this situation could lead to disputes over ownership, pressure from family members, and the chance that one party wants to keep the home while the other wants out.
Kamel and Coleman didn’t mince words. Renting for a year or two, they said, is not a sign of failure — especially for someone who’s taking on a new job and moving to a different state, while still figuring out whether he and his girlfriend will get married. They urged Jeremy to slow down, avoid using anyone else’s credit to buy a home and build his down payment in a different way.
“[It’s] not even the girlfriend, which we’d tell you is stupid,” said Coleman. “This is the girlfriend’s mom, which is next-level stupid.”
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Cosigning may sound harmless, but it carries enormous financial and legal risk for both parties.
A cosigner becomes responsible for the mortgage if the primary borrower can’t or won’t pay (2). That means late payments hit the cosigner’s credit, missed payments become their problem, and foreclosure appears on both party’s credit reports.
Many families cosign on homes because they want to help a family member with thin credit or limited income to qualify for a loan. Others believe it’s a faster track to homeownership or a way to offset high housing costs, but the downsides often outweigh the benefits.
Legally, cosigners share liability, not ownership. They’re on the hook for the debt, but unless they’re also on the title, they don’t have legal rights to the house itself. That becomes especially messy when relationships change, jobs shift, marriages dissolve or living arrangements fall apart.
A guarantor, by contrast, only steps in if the borrower defaults (3). They do not share the same level of day-to-day liability and typically aren’t evaluated as strictly as a cosigner, but most mortgage lenders don’t allow guarantors. For home loans, cosigning is the norm.
There are rare cases when cosigning can be appropriate. For example, parents sometimes cosign for adult children who have solid income but lack a credit history. But even then, experts say both parties should exhaust every alternative first.
Before anyone cosigns, they should sit down with the other party to discuss several crucial topics:
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Exit plans: What happens if one person wants out, moves away or ends the relationship?
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Payment responsibilities: Who pays what? How are repairs and emergencies handled?
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Ownership rights: Will the cosigner also be on the title, or are they liable without control?
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Timelines: Is the borrower committing to refinancing the mortgage in their own name after a year or two?
It’s also smart to put agreements in writing, even among families. A simple contract can outline expectations, payment structure and procedures if either party wants to sell.
But the truth is that cosigning should almost always be avoided — especially in situations like Jeremy’s, where the relationship is still young, the move is brand-new, and the borrower is financially capable of renting and saving on his own.
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The Ramsey Show Highlights – YouTube (1); Rocket Mortgage (2); SoFi (3)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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