The Financing aspect of partnerships?

[Aaron Millis]

Hi bp,

So I am looking for some clarity on how a certain type of partnership works financially. I'm not sure what the term is for it- but its basically the equivalent of a parent co-signing on their childs car. The parent and child both own the car but the parent doesn't actually pay anything towards it or do anything- and they were just using their status basically to help get the loan.

So when that ^ happens with two partners how would that work exactly? My main wonder is how it would affect the "Parent" in this scenario if- lets say they wanted to go get a loan somewhere else? Does the loan that was shared between them count as debt against the parent too?  

[Josh Engelhart]

From a business/ profit perspective you can structure the partnership however you want you want. It would be up to the two partners to agree on the terms of the arrangement and ideally put it all in writing.

From a future loan qualification perspective this monthly payment will count against the debt to income ratio for all parties for future loans based on this bank/ car/ mortgage payment being reported to the credit bureaus. If their income is high enough it doesn't really matter. If this is going to eat up all of their available income  and prevent them from qualifying to buy their own house/ car in the future you should probably figure out another way. (If it is a car loan and they can show that they are not making the payments some mortgage lenders will be able to ignore it)