My mother is going to put her house on the market soon and buy a condo to replace it. Currently she is not working. Her mortgage lender Washington Mutual is offering her a 200k home equity loan on the current house to be used toward the purchase of the new house so she does not have to come up with the downpayment on the new house if she finds one she wants to buy before selling her current one. I am not sure if I explained it exactly right but that is how I understand it to work. The issue the bank has is that she does not have job so they want me to cosign on it as I recently started my own business. Though because my income is shaky and I have been at it less then a year they will do it no income verification. They could do the same with my mother alone but they said that at least with me they can put a legitimate company down on paper. With her alone they can’t put anything unless they completely lie on the paperwork. I was wondering what the drawback of me doing this is since I may pursue a mortgage on investment property sometime in the next 6 months and don’t want anything showing on my credit that could cause me a problem getting approved. Will me cosigning on a HEL be an issue?
Your concern of this LOC affecting your credit is well warranted. Since you would probably go stated income, future loans will not be impacted because you can control the ratios, by adjusting your income.
I do not know what your credit is like currently. If your mother pays on time then it will help your score.