I am thinking about attempting to cosign a personal loan for my sister that will exceed the resource limit. But I do not intend to use the money, or even have rights to it if I can help it. Will this affect my SSI at all?
I am thinking about attempting to cosign a personal loan for my sister that will exceed the resource limit. But I do not intend to use the money, or even have rights to it if I can help it. Will this affect my SSI at all?
The answer is yes and no. It is not income however funds borrowed can count as a resource and money borrowed will partially count as money loaned. I advise against jeopardizing your benefits.
http://www.ssa.gov/ssi/spotlights/spot-loans.htm
Merely being a cosigner does not give you any right to receive any portion of the loan, and thus does not create an asset or income. However, it would be a very odd situation in which a lender deemed an SSI recipient to be an acceptable cosigner for a mortgage -- SSI income is minimal and cannot be attached by the lender, and SSI recipients are unlikely to have any non-exempt assets that can be reached by the lender in the event of default.
I am not talking about cosigning for a mortgage. I'm talking about cosigning for a personal loan so my sister can hand me about $10,000 cash and then getting a mortgage with the help of government programs.
Believe it or not, I have very good credit. I have already received personal loan offers from one of the credit card companies I do business with. And I have tentatively been told by a mortgage lender that I could be approved for more money than I am actually looking for to buy a house for myself.
My plan would be to get about the same amount of loan as I have credit card debt and use some or all of the money to pay off my credit card debt. So, in the end, my debt level wouldn't really change; but my sister would be able to make payments on the debt because it would have her name on it. (This is in lieu of me giving her a loan myself via a promissory note, which will count against me as an asset.)
As I understand this plan, your sister would be making payments on a debt that you both owe.
Since this a personal loan, it would be unsecured. Which means if your sister defaulted, the lender could put a lien on your assets, your house. Or get a judgment against you. And if the loan was not repaid, the interest and penalties would accrue.
Just because a lender will lend you more money than you want to borrow doesn't mean that it is a good idea. Lots of people forced into short sales in 2009 can attest to that. My suggestion is don't borrow money you can't afford to pay back.