Many young couples see the benefit of entering a homebuying agreement together. Their combined income allows them to purchase a home that might otherwise not be available. Similarly, children often need the financial backing of their parents to purchase their first property. But, buying a home is a long term decision. If all parties are not on the same page, trouble can sour the relationship and cause financial headaches for years.

A cosigner is guaranteeing payment if the principal signer cannot make the payments. That's why the Federal Trade Commission requires your lender to provide this statement before you sign the agreement: 'You are being asked to guarantee this debt. Think carefully before you do. If the borrower doesn't pay this debt, you will have to.' The FTC goes on to say,'If this debt is ever in default, that fact may become part of your credit record'

The benefits of partnering with someone else on a loan are indisputable. Parents can help children get past their short employment record and credit history to land a low cost mortgage. The beneficiary will be able to establish a long term, positive record. But watch out. According to loan information provider E-Loan, eloan.com, some studies have found three out of four cosigners end up paying the loan for the original borrower. E-Loan says if you are worried about getting stuck with a bill, try to negotiate specific terms with the lender. For example, sign for liability to cover the mortgage, but not late fees, penalty fees, or court costs.

If you cosign on a mortgage, remember that it is very hard to exit the agreement later in the term. According to credit company TrueCredit.com, you will need to either close the loan or refinance in order to break from the original agreement.

For more information on cosigning, visit www.eloan.com, www.truecredit.com, or www.ftc.gov.