A co-borrower, also known as a co-applicant

A co-borrower, also known as a co-applicant or joint applicant, is an individual who applies for a mortgage loan with another person, sharing the responsibility of repaying the loan. This type of arrangement is common among married couples, but can also apply to other types of relationships, such as friends, family members or business partners.

Co-Borrower Explained

Co-borrowing can be beneficial for several reasons, such as increasing the total income and creditworthiness of the borrowers, thereby making them more likely to be approved for a loan or to qualify for a better interest rate. It can also allow for a larger loan amount, since the income and assets of both borrowers can be considered.

However, it also has potential risks and drawbacks. For example, both borrowers are equally responsible for the debt, and if one borrower defaults on the loan, the other borrower is still liable for the full amount. This can cause strain on the relationship between the co-borrowers, particularly if one party is unable to meet their financial obligations.

Additionally, It can impact each borrower’s credit score, as the loan and its payment history will be reported on both individuals’ credit reports. If one borrower fails to make payments on time or defaults on the loan, both borrowers’ credit scores may be negatively affected.

Before entering into an arrangement, it is important for both parties to carefully consider their financial situation, including their income, debt, credit score, and other obligations. They should also discuss their expectations and responsibilities regarding the loan repayment, as well as any potential risks or complications that may arise.

In summary,  co-borrowers is a person who applies for a mortgage loan together with another individual, sharing the responsibility and benefits of the loan. While co-borrowing can provide advantages such as increased borrowing power, it also comes with risks and requires careful consideration and communication between the co-borrowers.


Q: What is a co-borrower? A: A co-borrower, also known as a joint borrower, is a person who shares the responsibility of repaying a loan or mortgage with the primary borrower. Both parties are equally liable for the debt and are listed on the loan application.

Q: Why would I need a co-borrower? A: There are several reasons why you might need one. Some common situations include:

  1. Insufficient income or credit history: If you have a low income or a limited credit history, having a co-borrower with a stronger financial profile can increase your chances of qualifying for a loan.
  2. Improved loan terms: Adding a co-borrower with a good credit score and stable income can help secure a better interest rate or loan terms from lenders.
  3. Shared financial obligations: Co-borrowers often include spouses or partners who want to jointly purchase a property or undertake a significant financial commitment.

Q: Who can be a co-borrower? A: A co-borrower can be anyone who is willing to share the financial responsibility of the loan and meets the lender’s eligibility criteria. Typically, it can be a spouse, partner, family member, or friend.

Q: What are the responsibilities? A: They share equal responsibility for repaying the loan. They are accountable for making regular payments, maintaining the loan’s terms, and ensuring the debt is cleared in accordance with the agreement.

Q: How does having one affect my credit? A: Having one can impact both your credit score and theirs. The payment history and loan activity will appear on both credit reports, potentially affecting each individual’s creditworthiness.

Q: Can I remove a co-borrower from a loan? A: Generally, you cannot remove one from a loan without refinancing or paying off the existing loan. Refinancing involves applying for a new loan in your name only, which requires meeting the lender’s eligibility criteria based on your individual finances.

Q: What happens if one co-borrower defaults on the loan? A: If one defaults on the loan, the other co-borrower is still responsible for the full repayment. The lender may pursue legal action to collect the debt from both parties.

It’s important to note that specific laws and regulations related to co-borrowers may vary by jurisdiction and the type of loan. Consulting with a financial advisor or a qualified professional can provide personalized guidance based on your specific situation.

Call Abo Capital today to discuss your real estate venture at (310) 984-8028, we’ve helped thousands navigate the lending process for over 35 years.