Technical finance question

[JoseCuervo]

Even if she has no connection to the business?
I won't bore everyone with the details, but as a borrower, you should have as few signers and guarantors as possible. It wasn't me, but stuff happens and the less you have at risk the better off you are. Modern banking is MUCH different than banking 10 years ago, they are looking to over-collateralize every loan. Very few people take out loans intending to default, a few do, but most people intend to pay them back. Bankers are scared right now, the Feds are killing them with paperwork and regulations to avoid making ANY bad loans. It's like the old joke that a bank will only loan you money if you can prove you don't need it!
But, that being said, they have the money, they make the rules.

Yep, even of she has no connection to the business (which is likely untrue/not realistic), the lender seems to want her on the hook.

And, yes, borrowers should want as few signatures as possible, opposed to the bank that should want as many signatures as possible. You are completely right that banks want to over-collateralize loans these days. But, interestingly enough, due to the fewer loans they make, they have become more competitive, in my view, on the fees and rates charged to make the loans.

Other posters have clearly explained why the bank wants her signature (death, divorce, state laws, etc).

Bank's money, bank's rules.

 

[N747JB]

It varies by lender and/or state, I think that's what the OP needs to know. I actually financed my last airplane, I did tell my wife of course, but she has no involvement in the loan, or ownership of the airplane, unless of course we split up for some reason, then I guess she gets the equity half.
Banks are falling all over themselves to make loans, only loans that have almost zero risk. But with the spreads they have now, I'd be trying to loan as much as I could.

Yep, even of she has no connection to the business (which is likely untrue/not realistic), the lender seems to want her on the hook.

And, yes, borrowers should want as few signatures as possible, opposed to the bank that should want as many signatures as possible. You are completely right that banks want to over-collateralize loans these days. But, interestingly enough, due to the fewer loans they make, they have become more competitive, in my view, on the fees and rates charged to make the loans.

Other posters have clearly explained why the bank wants her signature (death, divorce, state laws, etc).

Bank's money, bank's rules.

 

[JoseCuervo]

It varies by lender and/or state, I think that's what the OP needs to know. I actually financed my last airplane, I did tell my wife of course, but she has no involvement in the loan, or ownership of the airplane, unless of course we split up for some reason, then I guess she gets the equity half.
Banks are falling all over themselves to make loans, only loans that have almost zero risk. But with the spreads they have now, I'd be trying to loan as much as I could.

There is a judge somewhere that can likely tell you what her ownership status is...

I think bankers are still being rewarded for not losing money, more than the reward for making money. That mindset may take an entire generation of bankers to overcome. Incentive at the local community banks seems to still be very conservative.... But, if you are low-risk, they are happy to chop the fees, just not the collateral.

 

[Unit74]

FWIW...

After discussing the topic with the broker, I had no problem adding her, nor did she have a problem being on the loan. There are no devious reasons for my dissent on the topic other than adding 0 to any number simple does not change the number. She provides no qualifying value to the loan, but does provide a accessible route to our assets IF I cease to profuse as nature intended.

However, this was not how her involvement was proposed initially.

 

[FormerHangie]

I am curious why they want your wife on the loan. In my case, both our names are on the deed to the house, but not the mortgage, that's solely in my name. Her limited income isn't figured into it. I just bought a car, borrowed about 60% of the value, my name's on the title and the loan, they had no interest on her signing the loan.