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My wife and I currently own a home and finance two cars. We each have one car completely in our name and are co-borrowers on the house. I am about to trade in my car, and the interest rate will be better if she cosigns on the car.

If we wanted to buy another house, would the fact that she co-signed on this affect our ability to get the next house any worse than had I signed on my own?

This assumes no missed payments on the car, I just want to know if my wife co-signing this loan affects our borrowing power, when the income debt ratio for the household is the same.

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If you are buying the next house together, all your loans will be considered, so whether they are joint or sole will not matter.

What will matter is that you may be considered able to service a larger loan if she co-signs, because your car payments will be lower. That won't be the case if your limiting factor is the Loan-to-Value ratio, which will not be affected by the rate on the car loan.

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  • So am I correct in thinking that this will count as one loan and not two? Because for example if my mom co-signed, it would appear on her credit as if it was her loan as well
    – SaggingRufus
    Oct 7, 2019 at 21:16
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    It is only one loan. It will show up on both your credit reports, but it will only need to go on the house loan application documents once.
    – Rupert Morrish
    Oct 7, 2019 at 21:20
  • Thanks alot! I was worried it would count as two loans, but the car finance guy wouldn't really give a good answer, all I could get from him was "it should be fine"
    – SaggingRufus
    Oct 7, 2019 at 21:22

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