How would co-signing on a mortgage loan affect my loan?

OK, some things aren't making sense here.

1. Pre-approval is just a dress rehearsal. It means "if we were to give you a loan, this is what would happen", nothing more.

2. Co-Signing on another loan should not affect your credit unless the other person defaults. Co-Signing is all risk and no reward. If they did default, then it would be all on you and it would affect your credit if you didn't make it good.

3. How can you be locked in unless you are already in the loan process? This means you have given earnest money and have applied for a loan. This sounds like you are almost ready to close the mortgage . . .

DEFINATELY!

What will happen is this loan you cosign for your sibling will become part of YOUR debt. This will totally tip the scales when it comes to your debt/income ratios and can either knock you out of qualifying for a mortgage altogether or qualifying for much less of a mortgage than you had initially anticipated on getting.

Another thing to think about: Yes, I know this is a sibling and you want to help --- but this person as you stated has "messed up credit". Doesn't matter HOW she got that messed up credit, it is HER onus to fix it, not yours. Right now, your sibling needs to be renting, not buying, and working on paying her bad debt if she has some still and saving for a down payment. In 2 years, she would be in good shape again (if she re establishes credit) and probably will qualify on her own if she still has this *great* job and is paying her bills on time.

I personally would NOT cosign, especially since you want to get a mortgage yourself. Even IF she says in 2 years or whenever YOU would be ready to buy, she would get the loan in her name only, I wouldn't do it. The chances of her refinancing are 50/50....she may or may not have the ability to do it based on too many factors.

Even though you already have a pre approval, that approval is based on the information you gave at that time...any changes to your income or debt would change the approval. All that is locked in is the rate they quoted you, not the full approval.

First things first...Your rate may be locked in, but that is typically for 60 or possibly 90 days.

Next, any major changes to your credit can affect this pre approval.

Lastly, co-signing for someone on a mortgage will affect your credit just as if you had signed for the loan yourself.

If you co-sign for your sister, you WILL NOT get your own mortgage unless you'll be making $250,000 a year. Her note is your note and you'll have a potential of having to pay that mortgage plus yours. Since her credit is tanked, your lender will be very conservative when it comes to approving your mortgage to the point of not approving your note.

Being pre-approved means nothing until you apply. I get pre-approved credit card and loan applications all the time. When you apply, THAT is the time when the lender determines if you are QUALIFIED based upon your income/debt (potential debt) ratio. A lender is under no obligation to grant you a mortgage if you can't meet the payment obligations.

Bottom line, do not co-sign.

regrettably i do not comprehend how a lot help i should be yet i will attempt. you should use in simple terms the income you want to apply, all they want is verification of that income. they in simple terms ask for kinfolk income because maximum persons choose the most personal loan they could get. My sister and her husband used in simple terms his income for his or her first abode. i imagine you could practice for a private loan your self. i do not see why they could MAKE him co connect up it..... many unmarried people get mortgages established.... so why can not you. it may well be a private loan with a lot less provides, like no money down and also you will get stuck with a larger activity fee yet i do not see why you'll not be in a position of practice on my own. do not difficulty about the income, you should use what you want to apply yet call round to everywhere you could to examine on employing for one by technique of your self. in the experience that they are keeping no, ask why! Is it business agency coverage or some thing else? there is were given to be some thing to accomodate you.

Sorry, but there is NOTHING binding to a pre-approval. Since your financial obligation status WILL change by being a co-signer....of course that rate can change as well.

I've said it before and I'll say it again. never co-sign for friends or family members because by the time you find out the account is in default, the damage was already done.

Something I just read from Fidelity Investments:

You should make every effort in your life to not have any loans (including a mortgage) in your retirement.

This is the golden age to be debt free