Co-borrowers are two people, usually couples, who take out a mortgage together. They both sign the credit agreement and are subject to the same right and the same contractual obligation by participating jointly in repayment of the credit.
Be careful not to confuse co-borrowers and co-buyers: even if co-borrowers borrow to become owners together, they must both sign the authentic deed of sale to be co-buyers.
More on Co-Borrowers
When there are two co-borrowers who take out a home loan, the risk assessment then concerns the financial resources and expenses of the two people. It is thus calculated their debt ratio, their common personal contribution and the income they have left to live. Each of the co-borrowers is committed to the repayment vis-à-vis the lending institution. In the event that the loan is no longer reimbursed, the latter is then entitled to return as he pleases against one of the co-borrowers.
For a housing savings loan, if it is rather rare that the financing plan provides ELP credits from both co-borrowers, this is still possible. Each co-borrower then contracts each on his own according to his credit rights.
It is possible that the subscription of a home loan by two co-borrowers is done separately from the lending institution of his choice. But again, this is rare. The most common case is that of two co-purchasers taking out credit as co-borrowers. It is important to know that there may be more than two co-borrowers and that everyone has rights and duties.
In contrast to a married couple, cohabitants do not have a joint commitment to the debts. This means that if one is a borrower, the other will not have to pay in case of a repayment problem.
For pacssed partners buying under the separation of property regime, the situation is the same as for a married couple: they are both committed to the debt even if there is only one borrower.
The situation of a married couple depends on their matrimonial regime. In the case of a marriage under the legal community, it is possible for the spouse to become a co-borrower. Be that as it may, a married couple is jointly and severally liable for the debt in case of default, whether there is a borrower or two borrowers.
In the case of a marriage under segregation of assets, if there is only one borrower, the spouse is not liable in the event of a repayment default. And if there is a borrower and a co-borrower, they are both in solidarity with the debt.
The word of the broker
When you borrow two, it is possible to spread the loan insurance amount that is linked to your mortgage to guarantee it. As a percentage, this percentage refers to the level of coverage of each. From a minimum of 100%, it must be allocated to the choice of borrowers according to the income of each. Example: 70/30, 60/40, 50/50 … A co-borrower covered at 60% will see 60% of the remaining principal of the property loan repaid if he / she dies or ends up in a situation of total and irreversible loss of autonomy. The remaining co-borrower would then continue to only refund its share, or 40%. It is entirely possible for the co-borrowers to opt for a maximum coverage of 100%, ie a total insurance coverage of 200%.