Is being co-signer for student loan affects my credit score and cut maximum amount that I can possibly borrow?

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I’ve become a co-signer for $ 20000 student loan for my son, who’s not a US citizen or permanent resident yet.
I have a perfect credit history and mortgage free properties. I’m planning to sell them off and move to California, buy property there. And I will need a big credit line.
Is being a co-signer decreases the amount I can borrow in the future? Thank you.

Hi,

Question about First Time Home Buyer Credit:
I’m a California resident for the past 10years. I bought a vacation home in India few years back and deducted the mortgage interest paid on my vacation home on my tax return. The loaning bank from India doesn’t provide 1098 forms but I kept the records of interest paid.

That said, I bought a primary residence in CA this year in Feb10. Am I eligible for First Time Home Buyer Credit.

I read as long as I didn’t own a primary residence, I’m eligible but the question is since no 1098 forms were submitted for my previous returns, there is a chance that my previous ownership could be considered a primary residence.

Am I eligible in this scenario. If so how to communicate in my tax return the details of my previous ownership.

thanks

6 Comments
  1. Reply
    contemplating
    April 29, 2011 at 9:34 pm

    If it goes into default or has any late payments it will destroy your credit. You will be liable for those plus all the fees that got levied before you found out that your son was being irresponsible and started picking up the payment.

    Other than that it shouldn’t affect anything.

  2. Reply
    shiprepairwoman
    April 29, 2011 at 10:07 pm

    Your 20K debt will decrease the additional amounts you can borrow. When two people cosign a loan both owe the whole amount they don’t divide it.

  3. Reply
    Bostonian In MO
    April 29, 2011 at 11:07 pm

    I just love how people make stuff up — using the wrong head no less.

    There’s NOTHING in the law that implemented the credit that said you were not eligible if you had taken a home mortgage interest deduction. The law says if you didn’t both own and live in your principal residence in the past 3 years, you’re a first time buyer.

    While having claimed a mortgage interest deduction *might* trigger some questions by the IRS, it in no way renders you ineligible for the credit. To simplify matters, I’d attach a separate letter to your claim, laying out the deductions that you took in prior years. Attach copies of the loan documents and the deed to the property to substantiate that this is a second home that you did not live in.

  4. Reply
    tro
    April 30, 2011 at 12:02 am

    the FTHB applies to homes in the USA, it is not designed to stimulate any other economy but that of the US

  5. Reply
    the tax lady
    April 30, 2011 at 1:02 am

    In the letter you attach to the form, attach records showing where your primary residence was–eg, you had to live *somewhere* so where was it? What address has been on your tax returns? Are you paying rent or what?

    Vacation homes do not disqualify you. Paying mortgage interest on a second home does not disqualify you.

  6. Reply
    BuyingHelp
    April 30, 2011 at 1:25 am

    Perhaps you would want to know who can’t avail on the “First Time Home Buyer Credit”.

    Who Cannot Claim the Credit :
    1. If you are a non-resident, the home is located outside the United States, or you acquired home by gift, inheritance or from a related person. (Resident aliens even with ITIN are eligible).
    2. If you own more than 50% outstanding stocks of a corporation or capital interest or profits interest of a partnership.
    3. If you are or were eligible for District of Columbia first-time homebuyer credit.
    4. You buy your home from a close relative. A related person includes your spouse, ancestors (parents, grandparents, etc), or linear descendants (children, grandchildren, etc.).
    5. You stop using your home as your main home. You sell your home before the end of the year.
    6. Your home financing comes from tax-exempt mortgage revenue bonds.

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