topic Re: Refinancing to remove co-signer in Auto Loans

Refinancing to remove co-signer

joshk716 — Tue, 03 Mar 2020 15:26:42 GMT

Long story short, my sister needed a new vehicle in 11/18 so my now wife co-signed for her to get a decent rate and help her build credit. Since that time, I have personally added my sister as an authorized user onto my largest CL credit card so her score went from a 580 to a 770. We are looking to purchase a home soon and wanted to get my wife off the contract so I told my sister she should refinance on her own so its simply her loan. Is this a difficult process and what would be her chances of being approved? Her gross income is about $36k now and works full time, nothing negative on her credit. We are thinking of going with Navy Fed since they offer a $200 bonus to refinance and have competitive rates.

Re: Refinancing to remove co-signer

Harvey26 — Tue, 03 Mar 2020 17:57:58 GMT

@joshk716 wrote:
Long story short, my sister needed a new vehicle in 11/18 so my now wife co-signed for her to get a decent rate and help her build credit. Since that time, I have personally added my sister as an authorized user onto my largest CL credit card so her score went from a 580 to a 770. We are looking to purchase a home soon and wanted to get my wife off the contract so I told my sister she should refinance on her own so its simply her loan. Is this a difficult process and what would be her chances of being approved? Her gross income is about $36k now and works full time, nothing negative on her credit. We are thinking of going with Navy Fed since they offer a $200 bonus to refinance and have competitive rates.

It a pretty easy process. She would need to just apply for the refi and once approved they would pay off the joint loan and she would just have the new current sole loan.

Re: Refinancing to remove co-signer

joshk716 — Tue, 03 Mar 2020 18:17:38 GMT

Perfect. Based off the information above, do you think she would have any problems getting approved on her own? Any other CU or banks you recommend? She owes about 5800 on her car and the NADA is around 6200.

Re: Refinancing to remove co-signer

Harvey26 — Wed, 04 Mar 2020 17:49:44 GMT

@joshk716 wrote:
Perfect. Based off the information above, do you think she would have any problems getting approved on her own? Any other CU or banks you recommend? She owes about 5800 on her car and the NADA is around 6200.

I dont believe she will have any issue with this. Who is the loan currently with? Maybe she can refi through current lender.

Re: Refinancing to remove co-signer

joshk716 — Thu, 05 Mar 2020 19:50:58 GMT

She is currently with M&T Bank and they won't allow her to refinance until she has had the loan with them for 48 months, which is ridiculous because by that time, she would have about a year left on the loan anyways. Apparently not all loans they do include the 48 month clause but hers did due to credit at the time. Just a way for them to make guaranteed interest, even though the rate is 7.99%

Re: Refinancing to remove co-signer

Harvey26 — Thu, 05 Mar 2020 22:44:26 GMT

@joshk716 wrote:
She is currently with M&T Bank and they won't allow her to refinance until she has had the loan with them for 48 months, which is ridiculous because by that time, she would have about a year left on the loan anyways. Apparently not all loans they do include the 48 month clause but hers did due to credit at the time. Just a way for them to make guaranteed interest, even though the rate is 7.99%

Yeah I would refi that loan. I am pretty sure she could cut that rate in half and continue paying same note and pay it off just as quick. You guys set her up great!

Re: Refinancing to remove co-signer

joshk716 — Mon, 09 Mar 2020 17:58:04 GMT

Thanks! We're going to call tomorrow and get her all set up. Appreciate the guidance on everything.

Re: Refinancing to remove co-signer

Harvey26 — Wed, 11 Mar 2020 15:30:51 GMT

@joshk716 wrote:
Thanks! We're going to call tomorrow and get her all set up. Appreciate the guidance on everything.

Great! Let us know the outcome of everything!

Re: Refinancing to remove co-signer

joshk716 — Fri, 13 Mar 2020 23:06:47 GMT

Finally got a chance to call NFCU and they were able to approve her indepedently for 48 months at 12.99%, her payment would jump from $133 to $156. Over those 48 months she will pay about $600 more in interest than she would on our co-signed loan but unfortunately we don't see any other options as we are trying to prep our credit for buying a home in the summer. LendingTree offers were 18% so maybe the 12.99% isn't bad. Just shocked as her FICO Auto is 754 as per the NF rep.

Re: Refinancing to remove co-signer

Anonymous — Sat, 14 Mar 2020 15:20:00 GMT

@joshk716 wrote:
Finally got a chance to call NFCU and they were able to approve her indepedently for 48 months at 12.99%, her payment would jump from $133 to $156. Over those 48 months she will pay about $600 more in interest than she would on our co-signed loan but unfortunately we don't see any other options as we are trying to prep our credit for buying a home in the summer. LendingTree offers were 18% so maybe the 12.99% isn't bad. Just shocked as her FICO Auto is 754 as per the NF rep.

That is not a bad rate, especially if your sis does not really have any credit or previous auto loans.

She always can pay more if/when possible to save on interest.

And also further down the road, she can try to refi again.

Re: Refinancing to remove co-signer

joshk716 — Sat, 14 Mar 2020 16:47:49 GMT

That's also what I suggested. It's probably a mix of a young credit file and the age of the car (2012). She would also get a $200 bonus for refinancing with Navy so I told her to take that bonus and use $20 of it each month for a year so it's like she's paying the same as she is now until she gets closer to being able to refi with them. She did run her info through a local bank and is talking to the LO today about the rate and terms.

Re: Refinancing to remove co-signer

Harvey26 — Mon, 16 Mar 2020 17:04:18 GMT

@joshk716 wrote:
That's also what I suggested. It's probably a mix of a young credit file and the age of the car (2012). She would also get a $200 bonus for refinancing with Navy so I told her to take that bonus and use $20 of it each month for a year so it's like she's paying the same as she is now until she gets closer to being able to refi with them. She did run her info through a local bank and is talking to the LO today about the rate and terms.

Any update from local bank ?

Re: Refinancing to remove co-signer

joshk716 — Mon, 16 Mar 2020 20:33:30 GMT

Sorry for the delay. Sister applied for Cornerstone Community FCU in Buffalo NY, and they offered her 3.5% at 48 months, payment is $126.00 and includes gap coverage as well. Sorry Navy, haha!

Re: Refinancing to remove co-signer

Harvey26 — Thu, 26 Mar 2020 23:20:24 GMT

@joshk716 wrote:
Sorry for the delay. Sister applied for Cornerstone Community FCU in Buffalo NY, and they offered her 3.5% at 48 months, payment is $126.00 and includes gap coverage as well. Sorry Navy, haha!

That is AWESOME. Congrats to her on her approval! Yeah navy sometimes can be super funny about interest rates.

Re: Refinancing to remove co-signer

joshk716 — Fri, 27 Mar 2020 14:48:31 GMT

Thanks! Not a huge deal for her because NFCU didn't even do a HP, they said being young, they would do a soft until she formally accepted the offer. The local CU did indeed do a HP but thats only a total of 3 on her file. She has no complaints. Knocked off 3 payments and reduced her payment by a few dollars a month. Saving around $600 over the life of her new loan.