DEFINITION of 'Co-borrower'

Any additional borrower(s) whose name(s) appear on loan documents and whose income and credit history are used to qualify for the loan. Under this arrangement, all parties involved have an obligation to repay the loan. For mortgages, the names of applicable co-borrowers also appear on the property's title.

BREAKING DOWN 'Co-borrower'

A co-borrower is different that a cosigner in that a cosigner takes responsibility for the debt should the borrower default, but does not have ownership in the property. Co-borrowers are frequently spouses or partners who use their combined income to qualify for a larger mortgage than could be obtained singularly, and are willing to share the risk of default on the mortgage and the general risks of homeownership.

RELATED TERMS
  1. Joint Liability

    An obligation, including an obligation to repay a debt between ...
  2. Title Loan

    A loan where an asset is required as collateral. These loans ...
  3. Housing Expense Ratio

    A ratio comparing housing expenses to before-tax income that ...
  4. Combination Loan

    1. A transaction consisting of two separate loans for the same ...
  5. Reverse Mortgage Financial Assessment

    A review of the borrower’s credit history, employment history, ...
  6. Wraparound Mortgage

    A type of loan that enables a borrower who is paying off an existing ...
Related Articles
  1. Investing

    Financing Basics For First-time Homebuyers

    If you're looking to get your first mortgage, there are many financing options available.
  2. Personal Finance

    Getting Your Name Off A Cosigned Loan

    If your friend or relative has proved to be irresponsible, getting out of the cosigned loan can improve your financial security and options for borrowing.
  3. Personal Finance

    Reduce Interest With An All-In-One Mortgage

    "Offset" mortgages combine a checking account, home-equity loan and mortgage into one account.
  4. Personal Finance

    Understanding Loans

    A loan is the act of giving money, property or other material goods to another party with the expectation of being repaid.
  5. Personal Finance

    Mortgage Company

    A company engaged in the business of originating and/or funding mortgages for residential or commercial property.
  6. Personal Finance

    Interest-Only Mortgages: Home Free or Homeless?

    These loans can be beneficial, but for many borrowers, they present a financial trap.
  7. Retirement

    Business Owners: A Guide To Qualified Retirement Plan Loans

    Thinking of adding a loan feature to your company's plan? Here's what you need to know.
  8. Personal Finance

    The New Mortgage Business: More Than Just Loans

    Many mortgage brokers adapted to the post-subprime environment by becoming loan modification specialists.
  9. Investing

    What Happens To Your Student Debt If You Die?

    What happens to student debt when you die? It all depends on the lending agency.
  10. Personal Finance

    What Is A Mortgage?

    A mortgage is a loan used to purchase a home, where the property serves as the borrower's collateral.
RELATED FAQS
  1. What are the advantages of applying for a private student loan with a creditworthy ...

    Discover how adding a creditworthy cosigner to your private student loan application can help you realize more favorable ... Read Answer >>
  2. How many FHA loans can I have?

    Discover how many FHA-insured loans an individual may have, and learn about some of the exceptions, such as relocation and ... Read Answer >>
Trading Center