We talk about a co-borrower in a home loan when two or more people take out the loan together. The level of commitment of each depends on the chosen portion and must be specified in the loan offer.
Notions of co borrower and co purchaser
Borrowing in common gives no ownership of the real estate financed. To exercise this right as a co-purchaser, it is necessary to appear on the deed of sale. This situation does not apply to married couples who, especially when they are under the community of property regime, become joint owners of all the property they acquire during the marriage.
On the other hand, if you buy in concubinage, it is necessary that your name appears in the whole of the documents of purchase, both in the preliminary contract – the compromise of sale for example – and in the authentic act.
Borrowers are in solidarity with each other
Being a co-borrower of a mortgage is a decision that can be significant because each person in the loan agreement is solidary up to the amount borrowed.
Thus, if the couple stops paying the monthly payments, the bank may require one or the other to honor the deadlines. Each is therefore exposed to prosecution for non-compliance.
As well as couples married under the community regime, the people who are paid are jointly and severally liable for all the debts subscribed by one or the other, unlike cohabitants, even without having the status of co-owners. borrower in the prior offer.
Our advice : if you do not want to be in solidarity with any unpaid debts of your friend, the solution is to take out a loan each separately for the amount corresponding to the desired quota.
The purchase of a property by several borrowers does not change the nature of the risk analysis by the bank. The latter will be brought to verify the statements of account of each and will have to calculate the global indebtedness of the couple.
How to stop the engagement?
To stop the commitment you must obtain the agreement of your bank. This request is especially formulated when the cut separates. Two solutions are available to you:
- The first possibility is to resell the property and settle the debt.
- The second to make a redemption of balance, that is to say to buy back the spouse’s share.
When a couple takes out a mortgage, each of them must be able to prove a credit insurance cover. The minimum coverage must be 100% of the capital borrowed, the co-borrowers freely choosing their shareholding provided they respect the contribution of each in terms of professional income.
Thus, if one of the members of the couple contributes two thirds of the total income, it will be wise to choose a proportion of 70% for one and 30% for the other. However, nothing prevents you to better insure yourself and opt for a higher percentage.