What does "Co-borrower" mean?

Definition

A co-borrower is a person who applies for a mortgage with you. Both of you are legally responsible for repaying the loan, and you typically both have ownership of the home.

Understanding Co-Borrower Roles

A co-borrower appears during the application process to strengthen a mortgage application. They share equal responsibility for the loan and the property. In simple terms, two people apply together to boost the chances of approval. Example: If Alex and Taylor combine their incomes to qualify for a $300,000 home loan, they both own the property and are liable for the payments. It's not the same as a co-signer, who doesn't have ownership rights. Co-borrowers also benefit from shared equity growth, unlike a co-signer who merely guarantees loan repayment.

People Want To Know

What's the difference between a cosigner and a co-borrower on a mortgage?

A co-borrower applies for a mortgage with you and shares ownership of the home, making both parties legally responsible for repaying the loan. A cosigner, on the other hand, does not have ownership rights but agrees to repay the loan if the primary borrower defaults.

Who owns the house, borrower or co-borrower?

Both the borrower and co-borrower own the house equally. As co-applicants on the mortgage, they share legal responsibility for repaying the loan and typically have joint ownership of the property.

What's the difference between a primary borrower and a co-borrower?

The primary borrower is the main applicant for the mortgage and is primarily responsible for the loan, while the co-borrower applies alongside and shares equal responsibility for repayment. Both borrowers typically have ownership rights to the property, and their combined financial profiles are considered by lenders during the approval process.

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More From The Mortgage Glossary

Co-signer

A co-signer is a person who signs a loan agreement with you and agrees to be responsible for the debt. While they share the legal obligation to repay the loan, they usually don't have ownership of the property.

Collateral

Collateral is an asset that is pledged to a lender to secure a loan. For a mortgage, the home itself serves as collateral, meaning the lender can seize the property if you fail to make payments.

Construction loan

A construction loan is a short-term loan to cover the costs of building a new home. Once the house is complete, the loan is typically paid off with a traditional, long-term mortgage.