Non-occupant co-borrower: Does not live in the home with the primary borrower, but they still have an ownership stake in the property. A person who lives in the home is not automatically considered a co-borrower but can be included on the title of the home as a co-owner without needing to become a co-borrower.
What are the requirements to be a co-borrower? The co-borrower needs to be at least 18 years old, must be contactable, and should reside in the Philippines. Co-borrowers will be asked to provide consent through a link via SMS, wherein they will be asked to submit a copy of their Government-issued valid ID.
Co-Borrower vs.
While both share the financial responsibility, a co-signer is not included on the property's title and does not have ownership rights. In contrast, a co-borrower is listed on both the mortgage and the title, holding an ownership stake in the property.
Mortgage co-signers can be anyone willing, financially able, and who will not live in the home. However, they cannot be the property seller, the builder, the real estate broker, or anyone with a financial interest in the property's sale. There may be additional stipulations depending on the type of mortgage you want.
A co-borrower shares claim over any distributed loan funds or the asset, such as a home or car. Cosigners, on the other hand, don't have any legal claims to money from the lender or the property that the borrower purchases. Another important distinction is that co-borrowers are responsible for recurring payments.
However, you have an advantage if you are the co-borrower in this situation. If the other party stops making payments, as co-owner, you can take possession of the property. This is not the case as a co-signer. Remember that a co-signer is not on the title of the property and cannot take ownership of it.
If you can work out an arrangement with the co-borrower, paying off the mortgage will retire the loan and remove all names from the mortgage. This may require additional steps once the sale is complete, as you and the other party may need to work out compensation or ownership after settling the loan.
Both borrowers agree to make the payments on the loan. Both borrowers will also be considered owners of the property on the title when the loan payments are completed.
In most cases, the responsibility of the mortgage will be passed to the beneficiary of the home if there is a will. If you applied for your mortgage with a co-borrower or co-signer, the solution is relatively simple: The other party must continue paying the loan.
Joint borrowing vs.
However, these two ways of borrowing work differently. With joint personal loans, both parties share ownership of the funds and assets from the loan. A co-signer will not share legal claims over the funds and assets from the loan.
Yes, you can sue the person you co-signed for if they don't make the payments they promised to make. You may be able to get a judgment against them in court, but it could be hard to collect that money since they didn't pay the debt in the first place.
A non-occupant borrower is anyone, such as a parent, who is willing and financially able to be a borrower on the mortgage, but who will not live in the home. A millennial couple is buying their first home, and his mother would like to help.
The Federal Housing Administration (FHA) mandates that borrowers must occupy the property as their primary residence for at least one year. Lower credit scores may qualify for FHA financing, which typically requires a higher down payment. This 12-month period begins from the date of closing.
As a co-borrower, gaining substantial benefit from a loan means that you receive a reasonable portion of the benefit. So, for example, if you were to take out a home loan with your partner to buy a property in which you had an equal share, you would both be substantially benefitting.
Generally, co-borrowers share the title of the home. But this isn't always the case since the loan and the title are separate. Be aware that if you're a co-borrower and your name isn't on the title, you'll still be responsible for paying off the mortgage – but won't have the right to use the house.
As an equal partner on the financial agreement, a co-buyer shares the benefits of ownership and the financial accountability. This means that the co-buyer and the primary borrower have the same rights, such as the ability to sell the vehicle or trade it in (though both parties would have to agree to do so).
Just like the primary borrower, lenders take into consideration the co-borrower's income, credit history and existing debts, so if their debt obligations are too high, they may not be able to help the borrower qualify for the loan.
Both parties become co-credit applicants, taking on the financial risk of the mortgage together. This means the co-borrower essentially owns the house too, whether they live in it or not.
You can take legal action against them for breaching the agreement you both made or seek a court order to force the sale of the property. It's important to consult with a lawyer to understand your legal rights and options and to make the best decisions for your situation.
Miller & Starr, the leading treatise on California real estate, explains that: “As between the cotenants, each has the right to enter on and to occupy the entire property, and no cotenant has the right to exclude another cotenant from any portion of the property.” Right to possession, 4 Cal. Real Est. (4th ed.)
While only one co-borrower will retain ownership of the home after the other is removed from the mortgage, the departing co-borrower may still have to take additional action to remove their name from the house title and give up their ownership rights.
You both must agree to sell it. You may even have challenges selling your interest property.