All You Need To Know About Co-Signing A Loan: How might a co-signed loan affect your ability to get new credit?

Many borrowers, be they cosigner or primary borrower (also known as the maker), don’t recognize the magnitude of the responsibilities borne by co-signing a loan.  Even it is not delinquent, a cosigned loan is part of your credit history.   Since financial institutions consider a cosigned loan your responsibility, they’ll include it when calculating your debt-to-income ratio.

This ratio helps lenders judge whether you have too many bills to pay relative to your income. The cut-off point varies widely among financial institutions and the type of loan. If it’s too high, though, the result is the same: you loan application will be denied — even when the primary borrower never misses a payment on the cosigned loan.

To read the full article http://www.mcul.org/Loans_706.html?article_id=890

Samantha@ambroselawgroup.com

Ambrose Law Group 248-624-5500

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