Co-Borrower
Related Terms: Joint Loan
A co-borrower is someone whose name is on loan documents along with yours, and is equally responsible to repay the loan. Their income and assets, in addition to yours, may help qualify for a mortgage loan with better rates.
Since the co-borrower has ownership interest in the property, you may consider making your spouse the co-borrower on the loan. It’s very common for first-time home buyers without a huge credit history to go with a co-borrower to help secure a mortgage.
Being a co-borrower, however, isn’t the same as being co-owner. Joint ownership has to do with how the property is deeded, which is separate from the mortgage transaction. Co-borrowers do not have financial interest in the property either; they cannot borrow against the house the way you could as an owner, or profit from its sale.
There are exceptions to this in certain cases, such as when the co-borrower is a spouse, or related by blood.
Being a co-borrower, however, isn’t the same as being co-owner. Joint ownership has to do with how the property is deeded, which is separate from the mortgage transaction. Co-borrowers do not have financial interest in the property either; they cannot borrow against the house the way you could as an owner, or profit from its sale.
There are exceptions to this in certain cases, such as when the co-borrower is a spouse, or related by blood.
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