Co-Mortgages & Co-Borrowers
Owning a home is full of trials and tribulations and these are only complicated by complex mortgages and financing schemes to cover the cost of a home.
While your mortgage can be simple and straightforward, more often than not it is a source of significant distress for many people. But your mortgage doesn’t have to be a constant headache; it can be an excellent resource to meet your personal financial goals.
A co-borrower or a co-mortgage arrangement enables you to share the purchase of a home or property with another party. Sharing a mortgage binds you in a legal arrangement with another party and shouldn’t be done without seeking guidance from a financial professional.
If you want to learn about co-mortgages or co-borrowers and what they mean for you, you’re in the right place. With advice from MyFuture, discover how having a co-borrower can reduce the risk associated with a home loan or increase your spending power to get you into the home you want.
What Is A Co-Mortgage Or A Co-Borrower?
All the terminology surrounding mortgages can be confusing enough as it is. When you start adding in terms like co-mortgage or co-borrower, no one could blame you for throwing in the towel. But thankfully, these terms are pretty straightforward and are a reflection of their origins.
A co-mortgage is another term for a shared mortgage between multiple parties. It can be with a co-borrower who has shared ownership and shared responsibility for the mortgage payments; or it can be with a guarantor or co-signer who financially vouches for your ability to pay and may be liable if you default.
So let’s clear that up. A co-borrower has their name on the mortgage and is also liable for the mortgage. They share ownership benefits and responsibilities. On the other hand, a guarantor or co-signer does not usually enjoy ownership rights to a property, and may be liable if the mortgage holder defaults depending on the details of their mortgage contract.
Who Can Benefit From A Co-Mortgage?
Depending on whether you own your own home or are looking to buy a home or property, there are different ways you can reap the benefits of a co-mortgage or a co-borrower. Anything that can reduce the amount you owe or increase the spending power of the money you have to get you into a more valuable property is potentially good for you and your bottom line.
If you are looking to buy a home and you are thinking about using a co-mortgage, it has the potential to increase your buying power. A co-borrower who goes in equally with you has the potential to increase your buying power based on your combined incomes and/or assets. This is true of either a co-borrower or a co-signer as the combined incomes and assets of the involved parties will be considered in the mortgage loan application; the only difference is a co-signer doesn’t usually have a claim to ownership.
If you already own your home, you could potentially cash in on the equity of your home which could generate the funds to be able to purchase investments or further some of your other financial goals. Get in touch with our real estate and finance professionals at MyFuture to discuss your options and find the way to reach your personal goals.
Why Do You Need A Co-Mortgage?
A co-mortgage is an opportunity for anyone interested in owning property and reducing the financial risks of ownership. By sharing the responsibility with another party, your combined assets are considered in your buying power which determines how much you can spend on property. You are equally responsible for ensuring the mortgage payments are made bearing risk on each other’s behalf. A co-mortgage can mean the difference between getting into your dream property or having to settle for something less.
Don’t let your dream home slip through your fingers. Get in touch with MyFuture for a FREE no obligation Discovery Session to discuss your mortgage options today.
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When Is A Co-Mortgage A Bad Idea?
A co-mortgage may not be the best option for everyone. If you don’t want to share ownership of a property, you could still allow them to be your co-signer or guarantor, providing their financial resources with ownership.
If you’re not sure if a co-mortgage is a good idea for your needs, we’d be happy to talk you through it.
Who Is Responsible For A Mortgage When There’s A Co-Borrower?
A co-borrower is a partner in ownership and in a mortgage loan application who is equally liable for any and all payments the borrower has. Your mortgage lender doesn’t mind too much who the money comes from, so long as regular and on-time payments are made towards the mortgage loan. Should something happen to one or the other of you, any surviving borrowers would maintain ownership and responsibility for the mortgage.
Do I Qualify For A Co-Mortgage?
If you qualify for a mortgage, you probably qualify for a co-mortgage. A co-mortgage means you are partnering with another party, usually someone you know well, who you will combine resources with in applying for a mortgage loan.
You could potentially afford more for a home or property when you work with a co-borrower or co-signer.
How Can I Get A Co-Mortgage?
Getting a co-mortgage can be a more complicated process, so if you’re interested in financing your home with a co-mortgage and you don’t have a lender, or if you just want to see if it’s the right option for you, give us a call at MyFuture and we’ll be happy to go over your options and walk you through the entire process.