SGIP
- Thread starter so_scared
- Start date
Hi SGIP,
one of my close relative requests me to be a co-signer of his car loan.His FICO is I think below 600. Dealer finance is asking huge APR, so he has requested me to co-sign. BTW all this happened when he was at grad school and sharing an apartment with lease on his name. He moves out for job but did not transfer the utility account.... his roommates also eventually moved out and nobody bothered to pay the utility bill. So the missed utility payment finally went to collection agency. Now that he wants to buy his first car and then he knew that there is a ding in his FICO score. I would like to help him but at the same time I am also planning to buy home and have excellent credit history. If I co-sign his loan of say 20k, how will it affect my mortgage approval?
I have never been in such a dilemma and your opinion will be extremely helpful for me to make decision.
Thanks,
Madhuri
one of my close relative requests me to be a co-signer of his car loan.His FICO is I think below 600. Dealer finance is asking huge APR, so he has requested me to co-sign. BTW all this happened when he was at grad school and sharing an apartment with lease on his name. He moves out for job but did not transfer the utility account.... his roommates also eventually moved out and nobody bothered to pay the utility bill. So the missed utility payment finally went to collection agency. Now that he wants to buy his first car and then he knew that there is a ding in his FICO score. I would like to help him but at the same time I am also planning to buy home and have excellent credit history. If I co-sign his loan of say 20k, how will it affect my mortgage approval?
I have never been in such a dilemma and your opinion will be extremely helpful for me to make decision.
Thanks,
Madhuri
IndieDev
New member
Madhuri, don't do it, for the sake of your relationship with your relative. Cosigning a loan for a relative is the equivalent of taking out a relatives sexy wife for drinks and hoping things stay "innocent". They don't need a $20,000 car. Find a good reliable $5,000 car (old Civics, Corollas), and GIVE them the money.
sgip
Well-known member
It will impact your mortgage qualifying as new debt - 50+ FICO reduction - even though you are not making the payment. You are of course liable for the entire note and payment as a co-signer.
Today this APR is high due to FICO scores. In 6-9 months it won't be if this person acts quickly on this credit issue. The loan is not permanent and can be refinanced. If this person decides not to work on their credit, they must pay the price. You can co-sign if needed AFTER they get the loan and want to refinance once they've repaired their credit. By that time also your mortgage loan may have already closed.
You may want to help a relative, but responsible help is perhaps the better way forward at this time.
My .02c
Soylent Green Is People.
Today this APR is high due to FICO scores. In 6-9 months it won't be if this person acts quickly on this credit issue. The loan is not permanent and can be refinanced. If this person decides not to work on their credit, they must pay the price. You can co-sign if needed AFTER they get the loan and want to refinance once they've repaired their credit. By that time also your mortgage loan may have already closed.
You may want to help a relative, but responsible help is perhaps the better way forward at this time.
My .02c
Soylent Green Is People.