Getting approved for a mortgage isn’t always a walk in the park—especially if your credit or income needs a little extra strength. Fortunately, there are ways to boost your application and improve your chances of getting approved. One of those ways is applying with a co-borrower or co-signer.
While both roles involve adding another person’s financial support to your mortgage application, they serve different purposes. At Avanti Way Financial, we’re here to help you understand how each option works and which one might be the best fit for your home financing goals.
What Is a Co-Borrower?
A co-borrower is someone who shares equal responsibility for the loan and holds legal ownership of the property. Think of it as a financial partnership. Both of you apply for the loan together, and both of you are on the hook for payments. In return, you both get your names on the title.
Common example: A married couple buying a home together. Both spouses are co-borrowers, equally responsible for the mortgage and co-owners of the property.
Because lenders evaluate the financial profiles of both applicants, having a co-borrower can strengthen your application—especially if their credit and income are in good shape.
What Is a Co-Signer?
A co-signer takes on a different role. They agree to repay the loan if the primary borrower defaults—but they do not have any ownership interest in the property. Essentially, they’re offering their credit and income to help you qualify, but they’re not moving in or sharing the title.
Common example: A parent co-signing a mortgage to help their child buy a first home.
Co-signers are often used when the primary borrower needs a boost to their credit profile or debt-to-income (DTI) ratio in order to qualify for better loan terms.
Co-Borrower vs. Co-Signer: What’s the Difference?
| Feature | Co-Borrower | Co-Signer |
|---|---|---|
| Ownership interest | Yes | No |
| Rights to the property | Yes | Only with owner’s permission |
| Legal responsibility | Fully responsible | Responsible if borrower defaults |
| Impact on credit | Shared | Shared |
No matter which option you choose, the credit scores of both parties are factored into the lender’s decision. That means it’s always a smart move to review and, if needed, improve your credit before applying.
Pros and Cons of Each Option
Benefits of a Co-Borrower:
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Shared ownership and equal say in the property
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Stronger mortgage application thanks to dual incomes and credit profiles
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Ability to split down payments, closing costs, and monthly mortgage payments
Considerations:
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Both names are on the title—you’ll need agreement to sell or refinance
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Joint financial commitments can put strain on the relationship if disagreements arise
Benefits of a Co-Signer:
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Doesn’t require giving up property control or ownership
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Can help lower your DTI ratio and increase borrowing power
Considerations:
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Their credit score can take a hit if payments are missed
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Still legally responsible for the loan even though they don’t benefit from the property
Which Option Is Right for You?
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Need a partner to buy a home with? A co-borrower might be the better fit. This makes sense for couples, family members, or business partners buying a property together.
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Need help qualifying on your own? A co-signer could be the answer. This option works well if your credit or income needs a lift but you’re buying solo.
Does My Credit Score Still Matter?
Yes! Whether you’re applying with a co-borrower or co-signer, your credit score still plays a critical role. Most lenders consider the lowest median credit score among applicants—though some loan programs (like those backed by Fannie Mae) average your scores instead.
Better credit scores mean better rates—so don’t skip the pre-approval process or the chance to improve your financial profile before applying.
The Bottom Line
Both co-signers and co-borrowers can help you qualify for a mortgage—but their roles and responsibilities are very different. Co-borrowers share both the risk and the reward of homeownership. Co-signers, on the other hand, are there to support your application but don’t take ownership of the home.
At Avanti Way Financial, we’re here to walk you through every step of the mortgage process—from application to closing—with expert advice tailored to your unique situation.
Ready to Take the First Step?
Let’s explore your options together. Whether you’re applying solo, with a co-borrower, or with the help of a co-signer, our team is here to help you secure the home of your dreams.
