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Question about closing Co-borrower credit account before mortgage


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Not sure if this forum or the credit repair one is best, but since it's more related to purchasing a home, here we go:

My wife and I are planning to purchase a home in the next few months, and I have a question regarding an entry in my wife's credit file:

A few years ago, a line of credit was opened with Wells Fargo credit for the purchase of a computer for my wife, who was a student at the time. Her Mother was a co-borrower (or perhaps the main borrower, the details are fuzzy as the original account is over 10 years old) and the loan was paid off. When my wife and I were married, my mother in law re-established a line of credit with Wells Fargo, somehow using the same account and used the funds to pay for our wedding, in part. My wife's name was still on the account, but she never signed any papers for the new loan (it was rolled into). This was 5 years ago, and the account currently has a $2750 balance. My mother in law is making the payments of $70 a month and has never been late.

My question is this: My wife and I are planning to purchase a house in the next few months, how will this affect us? Should we make an effort to have my wife's name removed from the account, or should we leave it as is? My worry is that the outstanding high balance will hurt our utilization. But, if we remove it we'll take a hit on our credit score due to the closing of a longstanding account in good standing. Also, we are at the whim of my mother in law's payments (which she does make, no problems thusfar) but she is getting ready to retire and income may become shaky in the transitional period. Should we just leave the account as-is and hope for the best? This leaves a portion of our credit score at the mercy of my mother in law.

As of last week, my wife has 660 Equifax/650 Experian scores. Mine are not far behind. Overall our utilization could be between 10-15% on our credit cards, no other loans besides student loans which have good history.

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On the first place, your mother-in-law`s account with your wife as the co-borrower or the latter as the main borrower and your mother-in-law as the secondary borrower, has a very good standing loan account as you have said. Then that would be a great help for you. You can simply make a new acquisition due to your good record. As for the plan of your mother-in-law to retire ;then logically she knows the future of her account and I do believe that she had already prepared for that. The best thing to do is to keep a good payment records on your new account and your mother`s previous account.

Now, if ever you have a some sort of fund problem, I don`t think that would happen at the same time with your mother-in-law. Lend your mother-in-law a hand and somehow she will do the same on your part. Anyway, I don`t think money matter problems would come into your way.

The standing of your mother-in-law`s payment record would be of great help for your plan.

To be safe, refer your plan to her and collaborate with her decision if ever, and I think positive response would be attain from her. If she would denotes some difficulty in payment for the future then make other alternative to achieve your plan.

Hope you had my point but its up to you and your wife about your plan for a new account.

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