Need advice to get out of lease or refinance?
09-07-16, 01:25 PM
#1
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Need advice to get out of lease or refinance?
Hi guys! I need help! Can a co signer be dropped during refinance or trade in? I co-signed with my sister about a year ago on a 2015 RX350. While I love the car, its hurting my ability to buy a home. I need to find some innovative way to remove my name in a way that still makes sense financially. Im wondering if we could refinance and then only have my sister's name on the new deal???
Or perhaps trade in and get a cheaper car in my sister's name only....?
My sales associate says whatever we do, he thinks he is unable to remove my name in any of these scenarios. I asked if my sistercould take over the lease completely and he said he doesnt know, but maybe lexus financial could do it. I asked if we could trade in and only have my sister on the new deal and he said he didnt think so. I asked lexus financial and they said they think so, but need to bring to dealership finance guy....?
What rates should I expect/hope for with refinance? Can a co signer be dropped during refinance or trade in?
Or perhaps trade in and get a cheaper car in my sister's name only....?
My sales associate says whatever we do, he thinks he is unable to remove my name in any of these scenarios. I asked if my sistercould take over the lease completely and he said he doesnt know, but maybe lexus financial could do it. I asked if we could trade in and only have my sister on the new deal and he said he didnt think so. I asked lexus financial and they said they think so, but need to bring to dealership finance guy....?
What rates should I expect/hope for with refinance? Can a co signer be dropped during refinance or trade in?
09-07-16, 02:36 PM
#2
The reason the finance company (LFS?) required your signature is because your sister's credit was insufficient to do the deal you got. If you can find a finance company that will pay off the lease and refinance in your sister's name only, then it will work. However, she must have strong enough credit to qualify for this. Additionally, you will likely take a bit of a bath financially to pay off the lease and then purchase the car. You have nothing to lose by investigating this. But your sister's credit rating is going to be the key to any new deal, if it's possible. Right now it's all theory. You need to reach out to a bank and see if they will do this.
09-08-16, 05:26 AM
#3
Lexus Test Driver
I'm a little confused. You say you co-signed the lease for your sister, so I assumed it is her RX. But then you say you love car, do you and your sister share the RX?
How many months are remaining on your lease? This will play a big factor in what options you have and how much of a hit you take. For example if you don't have too many months remaining, you may have some positive equity on your RX which will help you get into something else less expensive so your sister can get approved on her own.
Contact Lexus financial again and ask for the buyout, also ask if you would be able to buy it out early with no early payment penalty. Assuming they allow you to buy it early, without a decent down payment your payments will likely be higher than they are now, so keep that in mind.
Also, it may be a long shot but if you want to get out of it all together try CarMax. I know some people that have had good experiences with them, and others that haven't. But it may be worth a call..
How many months are remaining on your lease? This will play a big factor in what options you have and how much of a hit you take. For example if you don't have too many months remaining, you may have some positive equity on your RX which will help you get into something else less expensive so your sister can get approved on her own.
Contact Lexus financial again and ask for the buyout, also ask if you would be able to buy it out early with no early payment penalty. Assuming they allow you to buy it early, without a decent down payment your payments will likely be higher than they are now, so keep that in mind.
Also, it may be a long shot but if you want to get out of it all together try CarMax. I know some people that have had good experiences with them, and others that haven't. But it may be worth a call..
Last edited by JT4; 09-08-16 at 05:30 AM.
09-08-16, 05:47 AM
#4
Driver School Candidate
09-08-16, 06:27 AM
#5
Lexus Fanatic
So let me get this all straight to make sure I have it.
You are both on the lease, but she pays the payments, correct? The vehicle is garaged at her address? Meaning that's the address on the registration?
If that's the case, and you can document that she is making the payments and you were just a cosigner then your lender should be able to get the underwriter for your home loan to ignore that obligation when calculating your DTI (FYI I'm a real estate broker). I've done this many times with homes where someone is a non-occupant co borrower (cosigner), never with a car but I don't see why it would be different. The obligation on a home loan is much bigger and if underwriters can ignore that in the DTI calculation in this situation they should be able to do so with a much smaller car payment.
The key is that she has always exclusively made the payments and that you can document that.
You are both on the lease, but she pays the payments, correct? The vehicle is garaged at her address? Meaning that's the address on the registration?
If that's the case, and you can document that she is making the payments and you were just a cosigner then your lender should be able to get the underwriter for your home loan to ignore that obligation when calculating your DTI (FYI I'm a real estate broker). I've done this many times with homes where someone is a non-occupant co borrower (cosigner), never with a car but I don't see why it would be different. The obligation on a home loan is much bigger and if underwriters can ignore that in the DTI calculation in this situation they should be able to do so with a much smaller car payment.
The key is that she has always exclusively made the payments and that you can document that.
09-08-16, 05:14 PM
#6
Lexus Fanatic
Do you have a car of your own, apart from the RX you and her co-signed on? 
I'm a little concerned that, if your sister can't handle even the revised payments, and the car gets repo'ed, she won't be able to get around without you (or someone else) providing what is essentially a taxi-service.
I'm a little concerned that, if your sister can't handle even the revised payments, and the car gets repo'ed, she won't be able to get around without you (or someone else) providing what is essentially a taxi-service.
09-08-16, 10:47 PM
#7
When did you buy the car? It will take at least 15 months for your and her credit to recover and move up. Since the car is a 15' it might not be 15 months yet, so both of your credit are not even the same as the time you lease the car, which, makes her even harder to get another car under her own name.
1. You can have another family member to take over the lease and still let your sister to make the payment and drive the car, but the person who taking over the lease will face a huge liability issue when something bad happens.
2. Pay off the remaining lease payment, believe or not, this would be the most efficient way and same the most money since you won't lose money on the trade in.
3. Trade in the car and let your sister qualify a car on her own. Yes it doable and CAN remove your name.
4. Make more downpay on your house, certain lender won't even check your credit if you put in 40% + down.
but in general, as an insurance agent, I always tell people to never co-sign for a car loan/lease, it's not only because it will hurt your credit if the buyer default the note, or your ability to not qualify for your own loan. But that if some big accident happenes and over your insurance limit, the owner is responsible to the liability, not the driver. Not matter how your family/friend willing to take the responsibility, once it's over the ability of the person, there is nothing they can do, and you are facing bankruptcy, or a million dollar law suit that can ruin your life. So think twice, three times before co-signing for someone.
1. You can have another family member to take over the lease and still let your sister to make the payment and drive the car, but the person who taking over the lease will face a huge liability issue when something bad happens.
2. Pay off the remaining lease payment, believe or not, this would be the most efficient way and same the most money since you won't lose money on the trade in.
3. Trade in the car and let your sister qualify a car on her own. Yes it doable and CAN remove your name.
4. Make more downpay on your house, certain lender won't even check your credit if you put in 40% + down.
but in general, as an insurance agent, I always tell people to never co-sign for a car loan/lease, it's not only because it will hurt your credit if the buyer default the note, or your ability to not qualify for your own loan. But that if some big accident happenes and over your insurance limit, the owner is responsible to the liability, not the driver. Not matter how your family/friend willing to take the responsibility, once it's over the ability of the person, there is nothing they can do, and you are facing bankruptcy, or a million dollar law suit that can ruin your life. So think twice, three times before co-signing for someone.
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09-10-16, 09:03 AM
#9
Lexus Fanatic
Above, any home lender will ABSOLUTELY check your credit for any home loan. A 40% down 60% LTV loan is underwritten just like any other loan, full credit check, same underwriting and qualification guidelines exist regardless of down payment.
09-10-16, 02:23 PM
#10
Lexus Champion
Hi guys! I need help! Can a co signer be dropped during refinance or trade in? I co-signed with my sister about a year ago on a 2015 RX350. While I love the car, its hurting my ability to buy a home. I need to find some innovative way to remove my name in a way that still makes sense financially. Im wondering if we could refinance and then only have my sister's name on the new deal???
Or perhaps trade in and get a cheaper car in my sister's name only....?
My sales associate says whatever we do, he thinks he is unable to remove my name in any of these scenarios. I asked if my sistercould take over the lease completely and he said he doesnt know, but maybe lexus financial could do it. I asked if we could trade in and only have my sister on the new deal and he said he didnt think so. I asked lexus financial and they said they think so, but need to bring to dealership finance guy....?
What rates should I expect/hope for with refinance? Can a co signer be dropped during refinance or trade in?
Or perhaps trade in and get a cheaper car in my sister's name only....?
My sales associate says whatever we do, he thinks he is unable to remove my name in any of these scenarios. I asked if my sistercould take over the lease completely and he said he doesnt know, but maybe lexus financial could do it. I asked if we could trade in and only have my sister on the new deal and he said he didnt think so. I asked lexus financial and they said they think so, but need to bring to dealership finance guy....?
What rates should I expect/hope for with refinance? Can a co signer be dropped during refinance or trade in?
09-10-16, 02:26 PM
#11
Lexus Champion
09-10-16, 05:40 PM
#12
about 5 years back, I was shopping with a friend of mine for a new Lexus. When it came time to run credit, he calmly tells the salesperson that I would be a cosigner. *****. I nod my head, and walk over to browse the cars, slink into the finance dept and tell the sales/finance guys that I am not a cosigner. They understood and came back saying that it did not go through with even me as a cosigner. Phew! He ended up getting an infiniti with Infiniti financings some 6.9% rate.
2 years later we had a falling out on some other matter. Can you imagine if I was a cosigner in that Lexus of his?
09-10-16, 06:14 PM
#13
Lexus Champion
No kidding.
about 5 years back, I was shopping with a friend of mine for a new Lexus. When it came time to run credit, he calmly tells the salesperson that I would be a cosigner. *****. I nod my head, and walk over to browse the cars, slink into the finance dept and tell the sales/finance guys that I am not a cosigner. They understood and came back saying that it did not go through with even me as a cosigner. Phew! He ended up getting an infiniti with Infiniti financings some 6.9% rate.
2 years later we had a falling out on some other matter. Can you imagine if I was a cosigner in that Lexus of his?
about 5 years back, I was shopping with a friend of mine for a new Lexus. When it came time to run credit, he calmly tells the salesperson that I would be a cosigner. *****. I nod my head, and walk over to browse the cars, slink into the finance dept and tell the sales/finance guys that I am not a cosigner. They understood and came back saying that it did not go through with even me as a cosigner. Phew! He ended up getting an infiniti with Infiniti financings some 6.9% rate.
2 years later we had a falling out on some other matter. Can you imagine if I was a cosigner in that Lexus of his?
Last edited by tex2670; 09-11-16 at 02:44 PM.
09-11-16, 12:00 PM
#14
Lexus Fanatic
Yeah I agree about the cosigning. The only time I feel its something I would do is if it were for my own children so they could get their first car, first house, etc.
