Auto Loan Refi Possible?

[mgs2010]

Back in June 2009 I co-signed a car loan for my mother who just had a ch 7 bankruptcy discharge may 2009. I co-signed for her to get a 0% auto loan thru Toyota Financial, perfect payment history since it was opened. Problem being...I am looking to purchase a home. My DTI ratios are ridiculous with this car loan on my credit...What banks, if any, will refi a car loan for someone with a ch 7 bankruptcy? She has had PERFECT history since the bankruptcy, she has 3 credit cards all with zero balances, and the car loan with toyota. No repo's or anything on her bankruptcy it was mainly just medical bills and a couple lousy credit cards like First Premier and orchard bank...so nothing too major....I was thinking maybe Capital One Auto Finance? But her vehicle is too new to refi with them as it is an 09 and when I attempted to apply on their site it says since the vehicle is a new model year they cannot take the application....so I'm hoping in a few days when its 2010 I will be able to apply thru them. Any other suggestions? I don't want to stick my mom with a 18% loan, so I'm hoping she can maybe get something decent like 9-11% would be acceptable....Thank You!

[mgs2010]

btw, I just checked her fico online and her EQ is 594 as of 12/23/09

[mgs2010]

Anyone? Please? I really need some help with this...

[Anonymous]

I dont want to discourage you but this will be a long shot. With a score below 600 it will be extremely hard. The BK shouldnt be a huge problem in itslf except it is hurting her score. The good news is she has some positive history since you are both on this loan. As far as 9-11% you can pretty much forget that. With a 600 score you would be hard pressed to do better than 15%. If you find someone to do it I think you should expect a 15-20% interest rate. If it is a 2009 model and you got it through Toyota with 0% financing that tells me you bought it new. That poses a problem in itself as I expect you guys are probably upside down in the loan now? Take that and her score and interest rate if you can find someone to work with her and her payment is going to go up considerably even though you owe less now than you bought it. I would expect depending on how much you owe on the car and all the specifics you will see a $100 month payment increase easily. Like I said hate to be the bearer of bad news but you are looking for a needle in a hay stack and if you find it can she afford the payments? I would check with her bank or CU if she belongs to one. If not maybe check credit unions in your area?

[Anonymous]

Also another obstacle I have never heard of a refi before the 1 year mark. Not saying it cant be done but that will be another challenge.

I dont know if possible or not but have you tried calling Toyota Financial and explain the situation and see if they can remove you from the loan even if it means giving her new terms? That may be worth trying. The worse they can do it say no.

[mgs2010]

Thanks for the insight, I really appreciate it! Yeah, I'm thinking you might be right....maybe I should just wait until the 1 year mark and see what can be done at that point...I already checked and she isn't upside down on the loan, shes about 1,000 right side up (is that the correct terminology to use??) Our original plan was to trade the car in June and see if she can lease a car through toyota since she will have a positive record with them and I've been told toyota is very forgiving of past credit problems....so maybe that will work out. I'm hoping so because I'm really kicking myself for co-signing this loan for her. Oh well, it could be a lot worse at least she is being responsible with it and my credit isn't getting bad marks.

[Jazzzy]

If she can refinance, even with a terrible rate for now, you can get yourself off this loan. Then, after you close your mortgage, refinance again with your name as cosigner for a better rate.

It's a temporary fix, if it can be done...but it doesn't have to last forever.

You're a good son for helping your mom...I'm glad she's acting responsibly. It can be pretty humbling to have to have your kids help you out.