Owning a home is a big thing and being part of home-buying deal is bigger than that. Thus, you must know the difference between the Co-borrower, Co-owner, Co-signer and Co-applicant in the home loan. A homebuyer must understand these terms to arrange funds for repaying the home loan under various different scenarios.
A person whose income is assessed to figure out if he/she is eligible for the loan and can repay the same. The lenders also check the credit history of the co-borrower to find if he/she has any outstanding loan amount. The person who is a co-borrower in a home loan is liable to repay the loan amount.
A Co-borrower has to be 18 years or more and should either be the spouse or an immediate relative. A Co-borrower should have a regular income as he/she is eligible to repay the loan amount in case the loan borrower dies.
A person who shares ownership in the asset/immovable property is known as a Co-Owner. This person holds a share of percentage in the asset. The ownership percentage is likely to differ as per the ownership agreement.
The Co-Owner hold right in the property similar to the main loan borrower. Maximum lenders prefer to have Co-Owners as the Co-Borrowers. The Co-Borrower can be a Co-Owner but a Co-Owner is not required to be a Co-Borrower in all the cases.
This person does not hold any right in the property but signs the loan document along with the main loan borrower. A Co-Signer is a person involved in the home buying process in case the main borrower has a low credit score. A Co-Signer is held responsible for the home loan if not for the EMIs.
This person shares the loan amount along with the primary loan borrower. A Co-Applicant enhances the chance of availing maximum loan amount as the eligibility of repayment also increases by having a co-applicant.
Things to Remember before Applying for Home Loan
Keep all these things in mind as being a secondary applicant in the home loan document may affect you in the future. Apart from these criteria’s, there are several conditions to meet and thus each home loan case is different from another.