Co-Applicant
You want to get a loan, but you don’t have the credit or the collateral. So you call up your parents to help you get that car loan or obtain a mortgage. They add their name to the application for credit for that car, or to pay for your starter home.
They are now your co-applicant, and they’re now on the hook for repaying the loan if you can’t meet your obligations. And if you miss your loan, and you end up back in their basement, they will now be doubly disappointed by your life choices and financial decisions.
Typically, it’s better if the co-owners are co-applicants, so married couples buying a car would be a more likely success story. A man and a woman who are co-applicants to buy a boat on their second date because they want to drop everything and, uh...take to the sea? Not so much.
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Finance: What is a Co-signer?7 Views
Finance a la shmoop what is a cosigner? well it's just this oh wait
that goes in the trigonometry video people why don't you do this all right [Man discussing trigonometry]
never mind cosigner it's this... okay all right we're in finance so a cosigner is
this there we go it's your mom you really wanted that
condo with the nice view of the park the cool arts district and the local dentist [Dentist office building]
office nearby for some weird reason but the building owners just didn't trust
you alone to make the payments yourself which makes sense given that you're a
part-time barista who takes at least one sick day every week you blame them so [Sick days marked on calendar]
your condo dream seems a well a bit out of reach luckily for you the bomb
or Bank of mom came in handy when she co-signed the loan along with you all [Mum signing loan agreement]
right what does that co-signing mean well it means that you are the first one
obliged to pay the monthly payments on your loan but if you don't well then the
Bank of America way bigger than the bank of mom can come after mom and she is
directly legally obligated to pay the loans that you promised - hey so yeah
you got your condo dream but mom's living quarters aren't so spacious yeah [Mum laying in a car backseat]
well you made her co-sign for your deadbeat self hanging her butt up to dry
and now she's well enjoying the view from her SUV parked on the curb of the [SUV window winds down and Mum appears]
road outside the dentist hang in there mom you'll get a better
parking lot slot with a view someday
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