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Category: Finance
Satisfied Customers: 4666
Experience:  Tax professional and business consultant for 35 years.
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My father owns two businesses. One of his companies, which

Customer Question

My father owns two businesses. One of his companies, which has been operating for roughly 30 years, needs to find new office space.
He is being personally sued and therefore can't sign the lease on the new space. As a result, he has asked me to sign — though I am not an officer or associated with his business. I believe I'd be a guarantor, in effect.
I'm willing to do this, but I plan on getting a personal mortgage later this year. I am aware of the risk involved in the event that my father isn't able pay rent.
My question is this: Will involving myself in a business lease impact my ability to get a mortgage?
Submitted: 1 year ago.
Category: Finance
Expert:  PDtax replied 1 year ago.
hi from just Answer. I'mCustomer I will assist. Signing on a lease does commit you to the lease, and if it is reported to the credit reporting agencies, your ability to obtain a mortgage will be impacted. Acting as a cosigner does impact your credit, and it would likely be reported to the credit agencies. Your mortgage application will likely include this question. The existence of this lease will likely impact, if not make impossible, your mortgage search. I might suggest using a corporation or LLC to obtain the lease, which might allow your father's business to take the lease in its name and/or his, without your involvement. Thanks for asking at Just Answer. Please rate my assistance when you accept my response. I'mCustomer
Customer: replied 1 year ago.
His business is incorporated as either an S or C corp (probably S corp). Are you suggesting that I obtain an LLC to sign the lease?
Expert:  PDtax replied 1 year ago.
i assumed your father's business was unincorporated. His business form, requiring his personal guarantee, is asking for yours because his guarantee is no good. I don't believe you can get your mortgage if you guarantee this at all. Only if you get your home now, then guarantee his lease later, will this fly. There might be another option. Your father might consider a surety bond to guarantee lease payments. Sorry i don't have any other creative way for you to sign and still keep your creditworthiness.Customer