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Why would I choose to be the cosigner of a loan for a relative if as primary I get a better interest rate Responsibility is not effected and I can get a 6.1 vice his 18 percent interest rate.?
Wiki User
∙ 16y ago
Responsibility IS affected as your name is tied to the debt. If he defaults you're impacted. If he can only qualify for a bad rate there may be reasons behind it - late/default payments, lack of history. The reasons the bank gave him a higher rate are the same reasons you should evaluate before co-signing the contract. Reply - I get all that. What I'm asking is if I am willing to co-sign (which makes me equally responsible for the loan) are there any reasons that I should not be primary on the loan - since either way I will be equally responsible. Being primary, lowers the interest rate and gets the loan paid off quicker. Reply2 - If your credit is good and you don't mind taking the hit (having the debt & payback history associated with your credit) then it could be a very nice thing to do for your relative. You know the risks and seem comfortable with them. It's a common practice (e.g. parents for a child's student loans or house purchase) and you're right, a lower APR can make a huge difference in the overall payoff amount. You may want to ask the lender what difference in responsibility, if any, you assume as primary versus secondary signator to ensure you're okay with the terms. Very nice of you to consider for your relative!
Wiki User
∙ 16y ago
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Does a mortgage cosigner have to be a relative?
No, you do not have to be related. you are signing a binding contract agreeing that both of you are responsible for the payments for that mortgage loan. You will both have to provide all the information- taxes, income, debts, assets, etc. Just be careful who you are getting yourself stuck with for 30 years. :)
If someone with poor credit bought a car with a relative as cosigner and the cosigner dies can the loan company call the loan or repossess the car if the other person continues to make payments?
In most cases the co-signer is in fact the borrower. I would think as long as you make the payments on time the lender will be o.k. with it, they usually want the money not the collateral back. I would read the finance contract(yes all the small print) there should be something stipulating the conditions for "due on demand". Hope thishelps.
Can you deduct interest on a home loan taken out from a relative not from a bank?
Here's what I found so far: To deduct interest payments paid as itemized home mortgage interest, the loan obligation must be secured by a recorded mortgage or deed of trust against the home. This can be doneby their signing and recording a mortgage or deed of trust to secure the promissory note.
What is relative scarcity?
Relative Scarcity is the fact that something is relatively scarce
What are the risks of cosigning a loan?
Under federal law, creditors are required to give you a notice that explains your obligations. The cosigner's notice states: You are being asked to guarantee this debt. Think carefully before you do. If the borrower does not pay the debt, you will have to. Be sure you can afford to pay if you have to, and that you want to accept this responsibility. You may have to pay up to the full amount of the debt if the borrower does not pay. You may also have to pay late fees or collection costs, which increase this amount. The creditor can collect this debt from you without first trying to collect from the borrower.* The creditor can use the same collection methods against you that can be used against the borrower, such as suing you, garnishing your wages, etc. If this debt is ever in default, that fact may become a part of your credit record. This notice is not the contract that makes you liable for the debt. * Depending on your state, this may not apply. If state law forbids a creditor from collecting from a cosigner without first trying to collect from the primary debtor, this sentence may be crossed out or omitted altogether. Studies of certain types of lenders show that for cosigned loans that go into default, as many as three out of four cosigners are asked to repay the loan. When you're asked for cosigning, you're being asked to take a risk that a professional lender won't take. If the borrower met the criteria, the lender wouldn't require a cosigner. In most states, if you cosign and your friend or relative misses a payment, the lender can immediately collect from you without first pursuing the borrower. In addition, the amount you owe may be increased
Do I Need A Cosigner To Get A Business Loan?
In case your cosigner has an excellent credit score and is a relative or closely affiliated with your business, this can help you qualify for a business loan.
Does a cosigner need to be a relative of the borrower?
If the lender requires it. They don't always, but it is sometimes preferred.
Can you tak a loan for your study?
Yes. If you are under 18 you will need a cosigner. This could be your parent or another relative with good credit.
Does a relative owe interest on money lent by another relative?
yes everyone in a customer
Do You need a cosigner if your married?
Having a cosigner has nothing to do with your marital status. It's all about your credit. If you do need a cosigner for lets say a car loan, then it's better to have your spouse sign than ask a relative/friend to sign. Unless your spouses' credit is bad, then you have to look into a person who has good credit. Hope this helps!
What does kinsman redeemer on a physical level mean?
relative that takes responsibility to care for family member
Can a 17 year old legally choose to live with another relative?
No, they are not yet considered an adult. Until that point, they are the parents' responsibility.
When you are earning interest is it better to have high or low rates?
High rates.However, high interest rates are usually a consequence of high inflation rates and so what matters is not the interest rate but the real interest rate which is the nominal interest rate relative to the inflation rate.Thus a 3% interest rate when inflation is 1% is better that a 5% interest rate when inflation is 4%.
What risks are derivatives supposed to manage?
manage such risks relative to interest rates, exchange rates, and financial instrument and commodity prices.
Does a mortgage cosigner have to be a relative?
No, you do not have to be related. you are signing a binding contract agreeing that both of you are responsible for the payments for that mortgage loan. You will both have to provide all the information- taxes, income, debts, assets, etc. Just be careful who you are getting yourself stuck with for 30 years. :)
Difference between classical approach and relative approach of probability with example?
Classical approach has possible outcomes which are known with certainity ie sampling distribution is known. Relative approach is an approach in which probability values are based on historical interest.
How a poor can start business as Islamic law?
A poor Muslim may start his business by borrowing money from some relative but without interest.
