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[203bravo]

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jnfedup wrote:
I agree, it would not be a very wise decision to co-sign.  I would only do this as a last resort, to be honest (family is family).  My question is:  Is there any way my brother can qualify on his own based on his financial situation.  He has only tried one bank and they turned him down.  I told him to apply at a few more institutions before coming to me again.  So, do you guys think he has any chance of being approved?

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I would seriously doubt it... Not with 5 months worth of recent missed payments.. Regardless of the reason this makes him a huge credit risk and the days of subprime lenders for anyone has passed.

Message Edited by 203bravo on 07-16-2009 09:08 AM

[txjohn]

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jnfedup wrote:
Thanks for all of the feedback.  Yeah, I know it wouldn't be a wise move on my part, but...he has always been very responsible with his finances (until he purchased a $400,000 home now valued @ $220,000). As far as the car loan for 36k is concerned, I agree, he doesn't really need it, he just wants to take advantage of the great deals out there at the moment (it's an Infiniti fx35).  He feels these "great deals" won't last much longer and I believe he thinks getting a good deal on this car will somehow make up for some of the money he has thrown away on the house. Anyway, thanks again for your input.

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We have a rule in my house:  You may not mention how much "off" the purchase is, you must communicate in terms of how much "on" it is.

For example my wife will get excited about a 30% "off" sale.  I always change the conversation to the 70% "on" sale.  A great deal in and of itself is not a great reason to buy.  It is a great incentive to buy "that" product if all ready in the market and all ready going to purchase.  But $36k is still $36k no matter how it is "structured" on paper.  It is no less expensive to pay back $36k on a great deal as it is to pay back $36k on a regular deal, all things being equal.

If he has not paid his mortgage in 5 months, then he should have around $15,000 to $20,000 CASH saved from the missed payments.  With that much down, he can qualify on his own GUARANTEED.  If he has not saved the money, then he has more money troubles than just the mortgage and you don't want to anchor yourself to that sinking ship.

[jnfedup]

Great responses, guys.  I agree, 36k is still 36k no matter how you spin it.  He does have about 14k put away at the moment.  The car itself is 43k out the door.  So what I have offered my brother is the following:  Apply at 3 different institutions (of my choosing) and if they all turn him down, then, and only then, will I offer to co-sign on a 20K loan.  This way he will be forced to come up with another 9k if he wants to make it happen.  In the end, he would have to put down 23k of his own money. 

What do you guys think, yay or nay?  I think it is more than fair. 

[ma_fico]

I think he should take $15k and buy a 2-year old Honda Accord, grow up, behave like an adult, and stop expecting his brother to take care of him.

But that's just me.

He's getting a "great deal" ?  He's dropping $36k on a DEPRECIATING asset.  Some deal.

[usmc58555]

NAY

No one needs a 43K car.

No one needs one who isn't paying his mortgage for whatever reason he isn't paying it.

14K "put aside" can buy several nice used vehicles.

"using you" to prop him up in the jam he got himself into is still "using you."

Have you considered what his intentions are with the house or the car?

Can he be attempting to game the system and by involving you. now include you in the game....and possibly fraud.

I am sorry I have no idea the dynamic between the two of you but..... this just kinda reeks sorry.

Will he want the car titled/registered in your name? If so you are really risking being considered an accessory to fraud.

[scorerise]

No. Do not do it.

You aren't risking your credit to feed his family.

You aren't risking your credit to keep a roof over their head.

He wants an over-priced luxury toy. His priorities are not straight.

Show him tough love. Tell him NO under any circumstances.

[JoeBJay20]

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jnfedup wrote:

Great responses, guys.  I agree, 36k is still 36k no matter how you spin it.  He does have about 14k put away at the moment.  The car itself is 43k out the door.  So what I have offered my brother is the following:  Apply at 3 different institutions (of my choosing) and if they all turn him down, then, and only then, will I offer to co-sign on a 20K loan.  This way he will be forced to come up with another 9k if he wants to make it happen.  In the end, he would have to put down 23k of his own money. 

What do you guys think, yay or nay?  I think it is more than fair. 

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I have no idea what the dynamic is between you and your brother, but judging from your posts it appears you have a very difficult time telling him no.  Credit is not a right, it is a privilege, and judging from the way he treats his mortgage, it is a privilege he does not respect and there one for which he is not deserving.  It's not just about how much money he puts in it, obviously the amount of money he has put into his mortgage was not a deterrent to his decision to discontinue paying.  The amount of the loan has no bearing on the damange it will do to your credit if he decides not to pay.  For the lack of a better phrase, you need to have a "come to Jesus" talk with your brother.  As others have stated, with 14k saved up he can get a very nice used car.  You don't need to be "fair", you need to be honest and assertive.  If he wants this "great deal" (and I would argue that unless you're getting it for free, there is no such thing as a "great deal" on a depreciating asset), let him figure out how to do it on his own.

[usmc58555]

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jnfedup wrote:

Great responses, guys.  I agree, 36k is still 36k no matter how you spin it.  He does have about 14k put away at the moment.  The car itself is 43k out the door.  So what I have offered my brother is the following:  Apply at 3 different institutions (of my choosing) and if they all turn him down, then, and only then, will I offer to co-sign on a 20K loan.  This way he will be forced to come up with another 9k if he wants to make it happen.  In the end, he would have to put down 23k of his own money. 

What do you guys think, yay or nay?  I think it is more than fair. 

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You already made your decision.

Not one of us who posted told you to do it or thought it was a good idea.

You are looking for an affirmation and I am not sure you will get it.

I am reminded of a quote from Neil Gaiman's The Sandman: I have no liking for prisons, Master Li. Sometimes I suspect that we build our traps ourselves, then we back into them, pretending amazement the while.

[marty56]

If you go down the cosign road, I would get a written agreement from your brother that you can take the keys and sell the car if he is late one time.  Again I would not do this but I understand why you would want to.

[jnfedup]

Update:  No one approved his loan applications.  He didn't have the extra $9,000 I asked him to come up with so he has opted to purchase a used 2008 FX35 for 31k.  He put down 17k and I co-signed for the remaining 14k over a 30 month period.  I know I know.... I may regret it, but hey, family is family.