Co-borrower

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. Low / No Documentation Loan

    A category of loans which generally fall into the Alt-A sector ...
  2. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against ...
  3. Maximum Loan Amount

    Describes the maximum amount that a borrower can borrow. The ...
  4. Direct Consolidation Loan

    A loan that combines two or more federal education loans into ...
  5. Combination Loan

    1. A transaction consisting of two separate loans for the same ...
  6. Origination

    The process of creating a home loan or mortgage. During the origination ...
Related Articles
  1. Personal Finance

    Financing Basics For First-Time Homebuyers

    If you're looking to get your first mortgage, there are many financing options available.
  2. ETFs & Mutual Funds

    Financial Institutions: Stretched Too Thin?

    Find out how to evaluate a firm's loan portfolio to determine its financial health.
  3. Retirement

    The Reverse Mortgage: A Retirement Tool

    Discover another way to fund your retirement without having to make payments on a loan.
  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

    Car Title Loan Requirements

    Here's a list of what you need to qualify for a car title loan. Most important: having sole ownership of your car with no liens.
  6. Investing

    Co-signing a Loan? Make Sure You Know The Risks

    Contractually, co-signers are just as responsible for the loan as the person actually borrowing the money. Be careful not to put yourself at risk.
  7. 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.
  8. Personal Finance

    Personal Loans vs. Car Loans

    How to tell whether a personal loan or a car loan is better for you.
  9. Managing Wealth

    Commercial Real Estate Loans

    Obtaining a commercial real estate loan is quite different from borrowing for residential real estate. Here's what to expect and how to get what you need.
  10. Investing

    Self Employed? 5 Steps to Scoring a Mortgage

    Convince lenders that you're a good bet despite your lack of a steady income.
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 >>
  3. What are the typical requirements to qualify for closed end credit?

    Learn what closed-end credit is, and the various requirements that borrowers must meet in order to obtain a closed-end credit ... Read Answer >>
  4. How can I transfer ownership of my home to another individual?

    Can I remove my name from the title on my property? Can it be gifted? I am still maki... Read Answer >>
  5. How does the loan-to-value ratio affect my mortgage payments?

    Understand what the loan to value ratio is, how the ratio is calculated and learn how it has an impact on your mortgage payments ... Read Answer >>
  6. What are the requirements for an FHA loan?

    Qualify for homeownership with an FHA-backed mortgage. Borrowers with imperfect credit benefit from this government-sponsored ... Read Answer >>
Trading Center