I co-signed and have a question.

I forgot to do research but I Had co-signed a vehicle for my sister but once I get her to refinance in 6 months can I take my name of the finance? Her credit is not good and she makes less than about 30k a year I think, well she qualify for a refinance under her own name? Her credit score is I think like 720.

I just don’t want to have the vehicle in my name once I can have her refinance it without me in about 6 months.

 

If her credit score is 720 (which is pretty good), she wouldn't have had any trouble financing her own vehicle in the first place.

 

It depends on what her income is. Credit score is one factor, but the other is can she afford to make the payments. She can always try to refinance without you on the loan to see if she'll qualify for the loan amount. I'd agree that a 720 credit score is pretty good. That makes me think it's her income that is making it difficult.

 

I let her be an “authorized user” on my discover card which gets little to no usage which brought up her score. She’s a stay at a home mother and she does part time job so she gets 30k or less per year.

I did not give her my credit card. Just brought her score up since I only put gas on that card and pay it off.

I Also helped my niece bring her credit score from nothing to a 760 since she was 16 and now she’s 18 l.

 

Get a finance person in your life.

 

My finance is good. I was just wondering if I can have her refinance without me in 6 months because the car I co-signed is worth 18k.

 

To refinance she would have better luck at a credit union than many banks. With her lower annual income a down payment on the refi may help.

 

She can totally assume full responsibility for the loan IF she qualifies (stable verifiable income and credit worthiness).

 

What is the current interest rate?
She may not want to refinance if the rates are higher.

 

He's suggesting you ask a person in the finance industry. Aka a loan officer from a bank, a credit union, etc.

 

Kind of, but probably not in this circumstance. Since she is part time, the bank doesn’t care about her credit score much.

This is the better route and will tell her what needs to happen in order for her to refinance it.

When I bought my ‘13 Tundra, I had just started my own business and was looking for a cheap beater to use for a year or two while I saved for a new truck - a truck being a necessity to haul and pull trailers. My local credit union with whom I’d had 1/2 dozen car loans with already (I flipped cars to pay for college so most of those loans were from taking the title in from the broken down vehicle to finance parts and rent for a month while I fixed it, my loan officer knowing full well what I was doing and was perfectly fine with it) refused to give me a $5000 loan. I cited my excellent credit rating at the time, asking if that had any relevance. She just looked at me sheepishly and said ‘not after the housing market collapse…’

I phoned a guy I knew growing up that worked at a different credit union and asked him what I could do to get a $5000 loan for a truck. He told me to go get a job at McDonalds for 6 months so I could have a pay stub to show the bank.

Toyota, on the other hand, was perfectly willingly to finance my NEW truck 100% at the best rate possible without a co-signer, citing my same credit rating as the primary reason. In fact, the salesman asked me, ‘are you sure you just want the base model TRD with tow package? We have a nice crewmax Limited on the lot that you qualify for at the same rate.’

For a new truck, they looked at gross income, not net, and my credit rating put me in high standing with them. For a used car, I couldn’t even qualify for a beater. I’m just saying I don’t understand the how’s and why’s but that’s what situation I found myself in. The OP may find it harder to get the vehicle refinanced than one would think, simply because it isn’t or won’t be a new car 6 months from now.

 

Here are some things to be considered. ***Let me be clear; without having a clear picture I cannot say whether these are problems or if there is one at all. These are just some factors that are considered in lending.
I work in banking. I worked in retail banking as a loan officer for 6 years and now work in private wealth. Things that are considered are: income, current available credit, current debt obligations, collateral, and credit.

Her income is not unreasonable, but when you factor in her monthly fixed expenses (rent/mortgage, utilities, other monthly payments, etc) it gets reduced quickly. Lenders will usually only allow a certain amount of debt-to-income to ensure the borrower has the ability to make the payments and not consume their entire income. The allowable debt-to-income varies but it's usually not more than 60%. If she makes $30k annually, then her allowable debt would be $1,500/month. $30,000/ 12 months x 60%. It also depends on if it's W-2 income or if it's all cash income. One is more stable than the other and that gets weighed.
While it is helpful to add her to your credit card because you're essentially giver her the history of that credit card and increasing her borrowing power with available credit; it also can be a problem. Underwriters will factor that into her monthly debit payments regardless of if there is a balance on it. Revolving credit (credit cards) can have a zero balance one day and then be maxed out the next.
It sounds like her credit might be fine if her score is 720, and the collateral shouldn't be a problem since a dealer or bank is loaning on it and accepts the value as acceptable collateral.

 

It is funny how things work sometimes.

All my vehicles I have ever bought, I NEVER had to actually prove my income. New or used. This even includes motorcycles. The financing was always based entirely off my credit score and my word on income. Which I was always honest about, thinking I'd have to prove it. Of course I wasn't buying stupid expensive vehicles, but it doesn't sound like she did, either.
Mortgages are the only loans I've had to provide proof of income.

 

It’s 9.59

 

When I bought my 2005 in 2004, I went to the dealer to look at 2 used Tundras.
I didn't think my credit was that good, although I had just paid off a bunch of credit card debt after a divorce in 1994.
When the saleman ran my credit he told me he could give me a better deal on a new one.
I got 3 or 4 rebates and 0% financing with a 5-year payment less than buying one of the used Tundras.
I paid the loan off in 4 years.

When my 2005 got in an accident in 2014, I didn't feel it was safe to keep it despite being repaired.
I bought my 2014 in December, and they were giving all sorts of rebates, trying to get rid of the 2014s and 0% financing on new trucks.
I wasn't sure what my credit score was, but the salesman told me I could buy any vehicle on the lot..
I got 0% for 5 years and paid it off in 54 months.

Another funny thing about credit scores;
My mortgage got sold to another lender, they do it all the time.
There was a month on my credit report that looked like my mortgage was paid off.
My credit rating dropped 50 points because I had less debt..
It went back up to over 800 when the new mortgage company reported the debt...

These days it hovers around 830 because the only debt I have is the mortgage.
The wife?
Well, that's a different story..

 

That'll definitely go up if/when she assumes sole ownership of the loan.

 

That’s awesome. They had a used 2011 on the lot when I bought mine; it was also cheaper to buy the new one as they were offering 0% financing vs 8 or 10% on the used one. That boggled my mind that I went from a credit union that wouldn’t give me a loan for a couple thousand dollars at a crummy rate, to Toyota that offered me 0%.

Of course, I’m not complaining about it in any way, so don’t anybody misunderstand. It just made zero sense to me.

 

Fun fact: here is the hierarchy of car loans with regard to rate and terms.
Dealership > Credit Union > Bank > loan shark.