Hi!
I just got accepted into law school and my sister is wondering if I can be co-signer on the loan w her.
I’m broker as hell and I’m really scared about how this will affect the amount of aid I’ll receive and the affect it will have on student loans.
Thanks.
This sounds strange. If you are in the position to be eligible for aid and you say you are broke, how would you be in financial shape to cosign for a loan, what lender will accept you as a student? Will you be the co owner of the house in that case? Will you need more loans that the federal loans for law school? It doesn’t seem to me to be a very smart move to cosign on someone else’s mortgage and be tied to that for years to come when your plans may require your own clean credit in the future. And you are promising to pay her mortgage if circumstances occur that she can’t or both your credit will be ruined.
how this will affect the amount of aid I'll receive and the affect it will have on student loans.
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Law schools don’t usually give grants for need based aid. Their aid is usually federal loans and sometimes some merit awards for very high LSAT scores. Being “broke” won’t get you “more aid,” since typically most grad students are “broke”.
What co-signed loan are you talking about? Are you saying that your sister wants to borrow money to buy a home, and she wants YOU to cosign?
If so, how the heck would a “broke” person qualify to cosign on a mortgage? Just having “good credit” is NOT what matters when it comes to qualifying for the mortgage. YOU would have to demonstrate that your income is high enough that the monthly mortgage payment is not more than XX% of your income (usually about 30%).
Since you’re broke, it’s unlikely that the monthly payment is 30% of your income.
Also, do you have any debt of your own?
So really, unless you have a strong income, then your answer to your sister is easy…you won’t qualify to cosign.
Unless you are receiving merit money for law school, the schools that give need based aid, many of the T-14 schools will require the income assets of you, your parents income assets (if you are under 30) and your spouse (if applicable).
You can borrow the entire cost of attendance from the federal govt as a Gradplus loan for law school - any need based aid (however, you would have to be creditworthy to borrow over the 20k grad loan limit).
Considering that the market is not very good for new attorneys now (unless you are graduating at the top of your class at a top school), if you have to borrow a crazy amount of money to attend law school, you probably should not be attending.
A cosigner is more than just someone to sign on it. Think about the responsibility and requirement.
If you are smart enough to be in law school…you should be smart enought to know that a loan cosigner must have sufficient income to be approved. Since you are broke yourself, and will be paying for law school, it is not likely you would be approved.
But if you are…and you are broke…do NOT agree to cosign.
And lastly…what financial aid do you think you will get for law school? Most of that will be YOUR loans.
It’s nice that you want to help your sister but you might not be the best choice for a cosigner at this point. In addition to your lack of income and assets, if – during the three years that you are in law school – your sister begins to struggle with the mortgage payments it may negatively impact your own credit score or even give you an adverse credit history, which could remove your ability to qualify for the federal loans that you need to continue on in law school.
Is there anyone else she can turn to for help? Ideally if she cannot qualify for a mortgage on her own she wants to find someone with significant income and assets to help her. This isn’t one of those things where ‘any warm body’ will do since as you know the cosigner must be someone capable of paying off the mortgage by themselves since in theory that’s what could happen if she is unable to do so for whatever reason.
Just wanted to add that if your sister can’t qualify for a mortgage on her own, she has no business buying a house.