Co-borrower

What It Means

A co-borrower is an individual who applies for a Joint Mortgage alongside one or more other borrowers, shares full responsibility for repaying the loan under Joint and Several Liability, and often holds an Ownership Share in the property recorded on the Deed. Each co-borrower's income, assets, debts, and credit history are evaluated as part of the loan application.

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In co-ownership, most co-buyers who appear on the Promissory Note are co-borrowers — they both own a share of the property and bear liability for the mortgage. This distinguishes them from a Co-signer, who guarantees the loan but does not hold an ownership interest.

Co-borrower vs. Co-signer

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Why It Matters for Co-owners

Not every co-owner needs to be a co-borrower, and not every co-borrower needs to be a co-owner — though in most co-buying arrangements, the two overlap. A co-owner who does not qualify for the mortgage can still hold an ownership interest on the deed without signing the Promissory Note. Conversely, a parent who co-borrows to help their child qualify may not intend to hold a long-term ownership interest.

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These distinctions must be documented in the Co-ownership Agreement. When borrower status and ownership status diverge, the agreement should define each party's financial obligations, Equity rights, and Exit Strategy — particularly because removing a co-borrower from the loan requires Refinancing, while removing a co-owner from the deed requires a new Deed.

Key Points

• An individual who applies for a joint mortgage alongside other borrowers and shares full loan liability
• Often holds an ownership interest in the property, unlike a co-signer
• Income, assets, debts, and credit are evaluated as part of the joint application
• Not every co-owner must be a co-borrower, and vice versa
• Removing a co-borrower from the loan requires refinancing the entire mortgage
• The Co-ownership Agreement should define each party's role when borrower and owner status diverge