Please Help! Really Sticky Situation! (interest rate, credit, financing, lender)

[Shwa]

How does taking on a new apartment lease affect one's ability to obtain a commercial mortgage and/or line of credit?

We currently own a home with a hefty mortgage and are planning to open a business in the coming months. A very close relative who is going through hard times has asked us to sign a one-year apartment lease for him (and he'll begin to pay us back early next year... hopefully) but I'm very concerned about how that will be perceived by lenders (especially during this current economic environment).

Will taking on this kind of commitment adversely affect our ability to secure financing for the new business? Will we be turned down? If not could we receive a not-so-favorable interest rate?

Please help! The realtor wants a deposit tomorrow!! Thanks!

[annerk]

It's quite possible the lender won't find out about it, but if they do it will be counted as a debt. I would suggest to the relative that he find a different place to live that doesn't require a co-signer.

[Shwa]

It's not even as a co-signer. We would be the actual signers which I suppose means "tennants" which isn't even the case. I'm really worried about this.

[Bette]

My husband and I have been in this situation more times than we would liked to have been. We have said yes; we have said no. The money has always been paid by the other person but they have used us as a co-signer.

In our situation, we had our backs put up against the wall even when we said no so it was very hard.

Does this other person know you plan to open a business and that by doing this it could affect that?

[jenniferwa]

Don't sign. Let the person stay with you until u get every thing squared away and then u can help. Sign it and you can't undo it.