Hi, so as the title sort of lays out, I cosigned for a car loan with my brother last year, and now I'm looking to buy a home in the next six months (preferably and most likely going to be sooner than later).
Details of important note:
1. I originally did not want to cosign for him, for many reasons. Mostly because I was fearful of this dragging along and I knew he didn't have the best financial track record. Got coaxed into it by him begging me because I'm the more financially stable of our siblings, and my dad saying he would have if he could, but my other brother recently bought a car with him so he couldn't help…I know the eye rolls and scoffs are valid, but family
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The cosigning I was told would only be for a period of 8 months and then it would drop off my credit. It has been more than eight months (I got the vehicle registration renewal notice in the mail this month so…)
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I've called the "dealership" a couple times now and they've either not been able to transfer me to the manager who sold my brother the car or they've told me that once he makes EIGHT PAYMENTS, then the loan should drop off and end my cosign en with him. So it's for how many payments he makes not a straight month period?
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I can see on my credit report he's missed back to back payments recently.
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He initially said he would look at refinancing after 6 months, but now has moved to a new state, new job, and " is working on it" according to our last text conversation.
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Planning to buy a house in my area based on my own income and debt, and this loan still being on my credit worries me about being able to explain this during the home loan process and my potential buying abilities.
I planned to reach out to the dealership again this week to see what happened or what can happen to get me out of this.
Seeking advice on what my options are, good or bad, and just want to know how I can plan to move forward in my life goals with this situation I'm facing.
Even if I can't get this off easily, or at all, I want to try and mentally prepare myself for what I'll be facing soon. Thank you :')
Cosigned for my Brother's car loan, now trying to buy a house of my own
byu/Particular-Drive-955 inpersonalfinance
Posted by Particular-Drive-955
20 Comments
This is honestly more of an r/relationships question and is a the classic horror story about why you should never do this.
You will remain on the loan until the loan ends. The only thing YOU can do to make this go away is pay off the loan yourself.
“I was told would only be for a period of 8 months and then it would drop off my credit. ” Did it say that in the loan document? Because that’s not how cosigning usually works. By cosigning you agreed to make all payments on the loan if your brother doesn’t. Since there are missed payments, that means, legally, you missed payments too. If you don’t want to damage your credit further, you need to start making the car loan payments.
> The cosigning I was told would only be for a period of 8 months and then it would drop off my credit. It has been more than eight months (I got the vehicle registration renewal notice in the mail this month so…)
You were lied to, or maybe you didn’t understand what you were being told. When you cosign, the loan is just as much yours as it is the person you cosigned for. It was really on you to research what cosigning actually means for your credit.
> I can see on my credit report he’s missed back to back payments recently.
If he can’t be made to make the payments, then you’re going to have to step up and do it. This is actively destroying your credit right now.
> I planned to reach out to the dealership again this week to see what happened or what can happen to get me out of this.
The only ways out of this are to pay off the loan, sell the car (paying off the loan in the process), or for your brother to refinance the loan under his name only. That last one probably won’t happen, because he’s been missing payments.
It’s on your credit until it’s paid off. The 8 month thing is a total lie. You can pay it and sue your brother for the money, or live with terrible credit for the next 7+ years. That’s what cosigning means, you promised to pay for your brother’s car if he didn’t, and he hasn’t. His own credit is terrible now too, so he can’t refinance. Sorry.
> The cosigning I was told would only be for a period of 8 months and then it would drop off my credit. It has been more than eight months (I got the vehicle registration renewal notice in the mail this month so…)
whoever told you this was bald face lying straight to your face.
Are you at least on title? Because if so you can take the car and sell it unless your brother agrees to refinance?
Not only are you on the hook for the life of the loan, but your brother is actively hurting your credit right this minute.
Talk to your loan officer immediately, but those missed payments may make it impossible for you to get a mortgage at all.
Frankly, you need to talk to your brother about this, and repo the car if he can’t fix this immediately.
If you let him keep the car he needs to prove to you that he’s making the payment every single month.
You are in serious trouble
The 8-month could be real, although it won’t apply in your case since loan is not good standing. Loan may be through a local credit union that will drop off co signer after loan is good standing for 8 months. In any case you would be contacting the lender not the dealer. There is also no reason to contact them since loan is not being paid on time, so they are not going to drop you. If he has missed last two payments you may want to go ahead and hire a lawyer to try to get possession of the car, the process will vary by state.
There is nothing to explain to your lender, the debt is yours and will count against you.
You were “told” the cosign is only for a period of 8 months?
Never heard anything like that before..
What’s the loan document a actually say?
unfortunately, you f’d up, and you’re now learning why cosigning is always a bad idea.
as a cosigner, you are responsible for the loan. if bro is missing payments, it’s going to trash your credit.
to protect your credit (for the sake of your house buying ability), you can make payments on the car note until you’ve been approved for your mortgage and closed on your new house.
that will prevent your credit from getting wrecked and hurting your interest rates/mortgage opportunities.
Your getting burned here. Your credit is getting shot due to missed payments, buying a house in 6 months looks grim unless you correct this. Catching up the payments will help but not fix the problem.
The dealership is lying to you. You won’t be off the loan until he refinances or pays it off. His payment history will impact your credit score and mortgage approval, and the payments will impact your DTI.
The best option is to make the missed payments, as that’s what you’re supposed to do when you cosign. It’s literally the point of cosigning. Those are YOUR missed payments, and you’ll need to make them to have any hope of mortgage approval.
>I can see on my credit report he’s missed back to back payments recently.
You’ve missed back to back payments recently. When you cosigned, you agreed to paying the loan on time and in full.
>can see on my credit report he’s missed back to back payments recently.
The credit report doesn’t show your brother missed payments. It shows you BOTH missed the payments. Since you co-signed you are both equally responsible for payments. Being a cosigner means ‘if they can’t pay I will.’ But you haven’t.
>Planning to buy a house in my area based on my own income and debt, and this loan still being on my credit worries me about being able to explain this during the home loan process and my potential buying abilities
You are right to be concerned. This loan appearing on your credit WILL affect how they calculate your left over income and it will also show an account you are bad at paying historically.
The only way off is you take the car from your brother (if you are on the title) and sell the car and pay the balance. The other option is your brother refinancing the loan into his name- but if he’s behind on payments it’s unlikely anyone will qualify him. Aside from the fact he doesn’t seem to care about how this effects you.
You have recent back to back missed payments on your credit report. That is going to hurt you. What does your credit look like otherwise? Any other missed payments? My advice, start making the payments and have your brother pay you. It’ll be a PITA, but at least you’re protecting your credit score from the actions of your brother. As it stands, you may have to wait on the house. Never cosign unless you’re willing to make the payments yourself.
Well, if you can afford the car payment and a mortgage then go ahead. I do hope you are on the title as a co-owner. You may want to allow the dealership, or yourself, to report the car.
I feel like cosigning needs some specific provisions in the rules about simple contract language that says something like
“By signing this you are assuming ALL responsibilities for this loan if the co-signer does not fulfill them. The only way to remove this responsibility is to pay off this loan in full, or refinance in a single signer’s name. Until then, all co-signing parties will remain fully responsible.”
People will still not read it or sign anyway because they were told “that part doesn’t apply”, but I feel like it would help.
You are currently not buying a house of your own until you have this taken care of. You need to understand this.
Sounds like you should just pay off the loan yourself and cut your brother out of your life forever. He’s willing to manipulate you into buying him a car at great personal cost to you. Sounds like a piece of shit human. If you can take the title of the car from him – do that as well. I don’t know why you would think there’s any other way out of this – you cosigned a loan. That’s your loan.
You have also missed back to back payments on your shared car loan now. Nothing was ever going to come off of your credit unless your brother refinancing the loan without you as a cosigner, which will be impossible with recent missed payments. You won’t be able to qualify for a mortgage with late payments for your shared auto loan.