Will Cosigning affect my future loans? ?
So my sister is asking my husband to help her cosign for her to buy a house because her income is not enough. My husband agreed to cosign for her; however, our daughter is going to medical school next year and needs my husband to help her cosign and get loans for her. Would helping my sister cosign right now for her house affect my daughter in getting her loans next year? My sister said that she will take out my husband's name immediately from the loan and the house paperwork after she buys it so he would not have anything to do with it anymore. Will her taking out my husband's name come into effect right away? All I want to know if it will affect our daughter getting loans for her education?
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don't do it. .............
Ok so we’ve all established that you and your husband should NOT co-sign for your sister.
Now, onto your daughter. I wouldn’t co-sign for her either. As I understand it, medical school is pretty expensive. If you were liable, that could totally mess up your retirement plans.
Has your daughter examined other ideas? Such as:
1. Live at home for 2 years, work and save every penny for the first year or two of med school. By the 3-4 year, the bank would probably not require a co-signer.
2. Look at future employers. Some will pay towards your medical degree if you will come to their town once graduated and stay for at least 2-4 years.
3. You agree to pay for her basic living expenses (shared apt, shared utilities, food, phone, computer, medical/dental insurance), She pays for her tuition, books, fees by taking out loans.
I didn’t co-sign for any of my two daughters’ college loans. Because I was paying living expenses. Maybe your daughter is asking for too much $, and maybe that is why they are asking for a co-signer.
The problem is if sister does not pay then the loan office will look for your hubby to pay for her, and this could mess up the loans for your daughter if this takes place!
Yes. Co-signing anything affects your debt to income ratios since it's considered one of your debts even if you don't make the payments.
Your sister cannot remove your husband's name from the her loan without refinancing. The bank won't allow it. Co-signing a loan makes your husband equally liable for it and adds it to his credit report. It very well may make it difficult for him to cosign your daughter's student loans. He should not cosign for you sister.
Your sister cannot "take out" your husbands name after closing. He will be committing to the life of the loan. I'd would advise against it as it will affect his ability to get any loans in the future.
If you are on her mortgage, you are equally liable for paying that mortgage, and will be hit if she doesn't. It will also show up on credit reports - so if you want your own mortgage, or any other loans, that will be taken into account.
If she can't afford it - she can't buy a house. This is a long-term significant financial commitment.
I think he should decide whether, or not to cosign, for one, or both of them.
"As a cosigner, you are responsible for the debt if your friend defaults. Consequences include: Calls from the creditor if your friend pays late. Late fees, penalties and accruing interest that will increase the principal loan balance."
it depends on how they do it
When you cosign something, that amount is included in your debt to income ratio, so affects your ability to get loans.