The co-borrower (usually the spouse or partner) is a person who takes out a mortgage with the borrower.
He signs the loan contract, is subject to the same contractual rights and obligations and participates jointly in the repayment of the loan.
Even if the most frequent case is that of a joint acquisition (the co-borrower then also becoming the owner of the accommodation), it sometimes happens that the latter does not buy. To become one, it must appear in the authentic deed of sale.
How it works?
When there are two people who take out a mortgage, the risk analysis then relates to the financial situation of the two borrowers, such as the calculation of different careers:
- Debt ratio
- Personal contribution rate
- Amount of living expenses
Each of them commits to the debt owed to the bank. If the credit is no longer reimbursed, the latter can then turn against one or the other. Note: even if this is rare at present because home savings loans are not advantageous, it is possible that the financing plan includes loans from the two co-borrowers. Each subscribed separately according to their right to loans.
Rights and obligations
The subscription of a mortgage by two borrowers can be done separately with the bank of their choice, but the case is rather rare.
The most frequent situation is that of a co-acquisition with a loan taken out jointly, which confers rights and duties for everyone.
Acquisition by cohabitees
Unlike married couples, cohabitees are not jointly liable for debts. This means that if only one borrower, the other will not be required to pay in the event of default.
Partners whose acquisition is part of the separation of property are, like married couples, joint and several of debts even if there is no co-borrower.
Acquisition by married couples
The situation depends on your matrimonial regime. If you are married under the legal community, it is likely that your spouse will be a co-borrower.
In any case, the couple is jointly liable for the debt in the event of default, whether there is a co-borrower or not.
If you are married under the separation of property regime, two situations arise:
- Only one is a borrower: the spouse is not united in the event of default
- There is a co-borrower: the spouses are jointly liable for the debts
In case of separation
In the event of separation, it all depends on what the members of the couple wish to do.
If they decide to sell the accommodation, the remaining principal owed will be reimbursed and the debt will be extinguished.
If one of the spouses wishes to keep the property, you will have to ask the bank to transfer the entire debt to the one relating to the property. For this, she will have to accept the loan separation (as requested for a joint account).This will end the joint commitment, the bank thereby renouncing the guarantee provided by the co-borrower.