Someone you know—a friend, perhaps—desperately needs to buy a new car. She asks you to co-sign a loan for her, pledging wholeheartedly to pay it off herself. What do you do? Before you decide to sign on the dotted line, make sure you’re aware of the possible consequences of co-signing a loan.

Why do some people need a co-signer in the first place? In most cases, the lending institution has determined that your friend is not eligible to receive the loan. This could be due to several reasons. Maybe your friend has not established enough credit history to qualify for such a loan. Or, in the worse case scenario, your friend’s credit history has been deemed risky enough to be denied the loan. In any case, the bottom line is that your friend was considered a lending risk, and thus, is not able to get the loan on her own. That’s where you come in.

Before you make a decision, know that the Federal Trade Commission has reported that, in cases where a loan goes into default, as many as three out of four co-signers are ultimately deemed responsible for repayment. These figures were derived from studies conducted among certain kinds of lenders, but you should keep the possibility of repaying the loan in mind if you decide to co-sign.

What other risks may you face if you decide to co-sign? In many states, if the borrower misses a payment, the lender can go straight to you. You may be responsible for late charges and attorney’s fees, and you run the risk of losing any collateral you may have set against the loan. In some cases, your wages could be garnished, or you may even face a lawsuit. Even if you avoid these risks, the loan you co-signed most likely will appear on your credit report as a credit liability. This could eventually lower your credit score, which may hamper your ability to gain access to credit if you plan to make any large purchases during the life of the loan.

If you’re still contemplating whether to co-sign, consider whether you would be able to pay off the loan on your own, in the case that your friend defaults. Even if your friend is reliable and gainfully employed, there is always the distinct possibility that she could somehow become unable to continue making payments. Are you willing and able to continue making payments if that were to happen? If you imagine this type of scenario would cause you great financial burden, perhaps you are not the best candidate to co-sign.

But if you ultimately agree to co-sign on a loan, there are some precautions you can take to make the process as easy and painless as possible. First, read over all documents carefully. Understand what kind of loan you are signing for, and all the terms for the loan. Ask the lender to clarify anything that you don’t understand, or that seems ambiguous. Also, make certain to get copies of all paperwork.

Most importantly, try to establish some specific terms with the individual you are co-signing for and the lender. One important term to establish is that you should only be responsible for the primary balance. This will help you avoid any late charges that may stem from the original balance. Also, in the case that the lending institution decides to sue, you will avoid being responsible for legal fees. Another important term to try to establish is that the lender should notify you in the case of any late payments. This allows you to become aware if any problems should arise, and you will be able to take control of the situation before matters become more complicated.

Even though co-signing for a loan may sound risky, there are certain situations where the practice is wholly reasonable. Parents, for instance, routinely co-sign for their children in order to help them establish credit, and to aid them in making large important purchases.

But what about your friend—do you co-sign, or not? The decision is ultimately yours, though it would be wise to balance the risks carefully. If you decide to co-sign, be prepared to treat the loan as if it were your own.

You’re ready to take that big step. You have enough in your savings for a down payment and you’ve decided it’s finally time to own your home. Buying a home is a complicated and even frustrating experience for everyone, but for first time buyers there is all sorts of added pressure. Just remember that veteran home buyers face the same concerns and confusion that you do – it’s just they have a little bit more experience coping with that pressure.

Here are a few tips if you’re just starting out in the property game.

Check Your Finances

You want to make sure that your finances are in order and that you have enough money to proceed with your dream of owning your own home. It is important that you take a look at your credit history before you apply for a mortgage so that you can clear up any mistakes or irregularities. You also want to have a good idea of what you can afford before looking at properties. You only want to look at homes that are within your budget and knowing what you can realistically afford before you start looking and sticking to that budget may save a lot of disappointment down the road.

Do Your Research

Before you begin house shopping, you need to know what you’re looking for. You need to know what kind of house and area you want to live in. Prepare a list of questions that you could yourself when looking at a potential property. These questions might include:

Is the neighborhood safe?

Is the house big enough for our needs now and in the near future?

Are there schools?

Is it close to work? If not, how much time will I spend commuting?

Is there public transportation?

What condition is the house in? What repairs will I have to make right off the bat?

What about re-sale value? Will I be able to make some money when I sell the house in a few years?

If you are planning on applying for a mortgage, you’ll also want to do some research on the different types and terms of mortgages that would be available to you.

Find the Right Real Estate Agent

Whether you’re buying or selling, it’s important you also do your research where a real estate agent is concerned. A good real estate agent will be knowledgeable of the housing market in the area you’re looking in and he or she will be able to answer most if not all of the questions you have about this process. It is important to build a strong relationship right from the start – it will make things much easier down the line. You’ll want to make sure that you find an agent that will keep your best interests (not the sellers or the agent’s own interests) first.

Put that Offer In

This can be a difficult part of the process for both the buyer and the seller. The buyer does not want to overpay or go beyond his or her budget, but at the same time token a seller does not want to give away the home. There are other factors to consider, especially a contract that outline what will and will not be included in the home (i.e. appliances).

Home Inspection

In some places this inspection occurs before you sign the final deal, while in others it is after it is finalized. This is an important step – you want to know exactly what you’re getting yourself in to when purchasing a home. If there are problems with the home, you want to know that right off the bat, not a few months down the road.

Closing the Deal

Closing (also referred to as settlement) is when the ownership of the property is transferred to you (the buyer).

What about buyer’s remorse? A lot of people experience it. You love your home when first see it and you can’t wait to move in, but once there you begin to have your doubts. Did I pay too much? Can I afford to do this? Is this really the perfect house or should I have held out a bit longer to see if anything else came on the market? These thoughts go through the minds of almost anyone who has bought a home at some point, but they can certainly be overwhelming for the first time home buyer. Just trust your instincts and try to remember what made you fall in love with the house in the first place!

Over the past decade, thanks to a real estate market that has been performing consistently well, home equity financing has become a viable option. This in turn has made the credit or loan option for home equity financing for consumers worth considering. Since everyday Americans realize the value of owning one’s own home to raise capital and refinance debt, home equity as a solid foundation is a powerful financial base to build on.

The year 2003 was a rollercoaster ride for the American stock market, but was consistently steady for the real estate market. Though the prices of homes continued to soar, it proved to be a happy trend as it proved that people still saw a home as a smart investment. This is good news for you, house owners—it signifies that despite the economic outlook, the value of your home continues to appreciate. This perhaps should give you the impetus to consider taking a financing option such as a home equity loan or line of credit.

Why consider home equity: Take for instance the rising worth of your own home and the boom in the real estate market—two solid reasons for you to seriously consider taking home equity financing. For one, home equity financing comes with a lot of tax advantages for you. You might also be able to reduce your taxes by claiming the interest you pay on your home equity credit as a deduction. Speak to your tax consultant about this. If you want to borrow money or secure your debt, you’ll find home equity products a smart choice since they carry a lower interest rate than other loans and may, therefore lower your monthly payments.

How to leverage your home equity financing: If you want to get the best out of your home equity financing, you could choose to do it as most people do: use it to refinance your debt and pay back higher-interest loans. But if you are fortunate enough not to have loan balances to repay, you can further raise the value of your house by improving it.  Perhaps you want to give a facelift to your kitchen or garage? Perhaps you need to add a second storey? These projects can easily be financed by home equity credit. Take a look at just how fellow-Americans get the most out of their home equity. And then, put it down to the boom in the real estate market.

Your kind of home equity plan: You can choose from either a home equity loan or a home equity credit line—something that largely depends on your needs. But to set yourself into estimating how much financing you require, you should consider a home equity loan. If you do, you will need to borrow only as much as you need for your home improvement project. But if you can’t estimate your needs, your best bet is a home equity line of credit might be a better choice. This is also helpful if you have more than one need such as reducing your credit card out standings and debt, besides also paying for a big purchase—both of which will demand ready access to huge sums of cash.

If your need is for stability or flexibility, yet again, home equity loans give you a steady payment plan. This means that your interest rate and monthly payments remain fixed over time. On the other hand, a home equity line of credit is as flexible an option as a credit card with your payments being judged against how much you borrow and the interest rates varying proportionately with a change in Prime Rates. And, if you need financing all together or once in a way, think again because a home equity loan can give you all the money you need all at once too! Besides, with this, you can borrow as much as you like when you want it, just so long as you remain within your prescribed credit limit.

Financing your home is a big decision for you. True, there are very many home equity loan products available today, but you need to think well about the home equity line of credit that suits your financial goals.

APR, FICO and HELOC are terms that are used for interest and loans within different areas of living. While each has certain rules and regulations, they all are important ideals to pay attention to with credit, loans or interest.

APR stands for the Annual Percentage Rate. It includes the yearly cost of a loan calculated in a fee as a percentage. It will include interest and insurance in the calculation of costs. The APR is most likely to be included in mortgages, credit cards and car financing. By knowing what the APR is of a certain loan or credit card that you are about to get, you will be able to see the best loan or finance to invest in.

For credit cards, there are a couple of different types of APRs. The first is for purchases. These APRs should generally be lower than any other type of rate that you would receive. The second type of APR in credit cards is for cash advances. If you have to take a loan out of your credit card, or go over your limit, the APR will automatically increase. Balance transfers are the third type of APR that will affect your credit. By making a balance transfer from one credit card to another, your APR will also increase. There are also tiered APRs where different rates will apply to certain levels of outstanding balance that you may have on any type of credit or loan. A penalty APR may also apply. If the credit card or loan is paid late one or more times within a given amount of time, the APR will also include a penalty rate.

If you already have an APR, you can always try to get it lowered. There are several ways to do this. If you are looking at an APR for a mortgage, you can negotiate the closing costs and keep your mortgage for a longer period of time. This will automatically drop the APR to fit with the time period and annual rate which you must pay.

FICO is an acronym for Fair Isaac Credit Organization. The Fair Isaac Corporation is a company that provides several financial services of several different kinds. This includes mortgages, insurance and healthcare. One of their branches is FICO. Through this company, you can be given your credit scoring and advice on how to have good credit. If you are applying for a new loan or credit card, lenders will most often go to FICO to find the score of your credit.

There are three parts to this score, including your interest rate, your monthly payment, and a number which is your FICO score. The higher your number is, the less you will have to pay on your loans or credit cards for interest rates and monthly payments. These estimates are based on how many credit cards you have, the history of your loans and credit cards and the balance on these different types of credit cards or loans. By estimating your score, you will know how much you will have to pay in a new loan or how much will be available for a new credit card which you are applying to.

HELOC is an abbreviation for home equity line of credit. HELOC is mainly used for taking out a mortgage or a loan for your home. By using this type of credit, you will be able to have a larger amount of credit available with a lower interest rate. This type of credit line is usually based around a variable interest rate, as opposed to a fixed rate. This means that the interest rate will change according to the public margin. Because of this, it is advised that you look into the index and margin that each lender uses so that you can have the best fixed rate. There is also a cap, or fixed amount with the variable rate plan, allowing the interest rate to only go a minimum or maximum amount.

The first step into getting a home equity line of credit is to be approved for a certain amount that is given by a credit company. This is usually taken on a percentage that is appraised from the value of your home. Your ability to repay the loan will then be looked at. Things such as your income, debts and credit history are looked into to see how much you can qualify for. Once approved for a certain amount, you are then able to draw from these funds as you would a bank account. Depending on the type of credit line you have, there may be limitations on how much you can draw from at one time. If you decide to sell your home, you will most likely be required to pay back the home equity line in full.

No matter which type of credit or loan aspect you are looking into, knowing what they mean and what applies to each area will help to lower your costs.

You as the buyer or seller will have to appear at a meeting in which all of the final legal details will be handled, this is known as the closing. Others in attendance are the realtor, lender and a closing agent. The meeting usually occurs either at an agent’s office, or at a lending institution such as a bank or mortgage company. The main emphasis is to review all of the paper work, and to sign the different forms for financing, and to transfer title to the new owner. For the buyer and seller knowing what to expect can ease concerns on the process of closing.

Typically the buyer will have a more of a role to play in the process of closing on a house. However, the seller will have an important role to play too. Usually a review of the settlement sheet is presented first for both to sign and agree upon. You will need to be sure about the terms and agreements before you sign. Next the buyer will be required to show proofs of required mortgage insurance, and that all necessary inspections have been completed according to the guidelines of the contract. All parties must be in complete agreement over terms and sign the documents. Once this phase is completed both parties will present a certified check for the entire amount of the closing costs. The lender will present the funds paid to the closing agent, also if there are any funds due they will be submitted at that time to the lending agent.

Depending on the requirements that you agreed to as a buyer, for example your bank or mortgage company may have stipulated that any you will need to set up an escrow account to pay your property taxes, or may be your designated home insurance provider out of this account, this will be efficiently handled at the closing meeting for your new home. Other issues such as the recording of the deed will be discussed. Don’t be surprised if your informed that you don’t have legal claim to the property until it is officially recorded at your local courthouse. It is to be understood that you may not move in until you have legal ownership of a clear title, and this process can take from a few days to over a week. This is why disbursement of funds to anyone involved in the transaction will not be paid until the deed recording is completed.

If you’re the buyer you will need to know what forms you will be required to sign. Take a few moments and write down a check list, and bring along copies of any paper work that you have been required to sign or review. An important document known as the Truth in Lending statement will contain vast amounts of financial information for the buyer. This statement will contain information such as your interest rate for the mortgage, amount of the cash financed, and your monthly payment schedules along with the total amount paid based on the length of your loan. Detailed information will be found in other paper work for the buyer too. The mortgage note and other assigned specifications will spell out in specifics terms such as how and where the note is to be paid, and the institutions right to reclaim their rights to the property. This legal documentation will also explain that you’re to meet other specific requirements, such as paying any necessary insurances and taxes yearly, that is of course if you are allowed to pay this independently, and is not part of an escrow account.

The value and importance of a good realtor is quickly appreciated in the closing meeting. Many of the processes involved are readily explained by a caring and competent professional before the closing ever takes place. Make sure though that you do your part by taking the time to ask any questions that you have with your realtor, and studying if necessary your part of the process, whether you’re the buyer or seller. Home buying and selling can be a pleasant experience for all of those involved without a lot of hassle and grief. Just make sure you approach it with the right attitude and guidance.