Co-borrower vs cosigner: Which is better?

In this article:

Both cosigners and co-borrowers can make it more likely that you’ll qualify for a mortgage. However, each has a different level of responsibility for the loan and the asset that it ultimately is used to purchase. Because of this, each is more appropriate in different situations.

A co-borrower takes out the loan with you and is equally responsible for it and the property. A cosigner signs the loan with you but is only responsible for it if you neglect to pay it. They do not own the property.

Difference between co-borrowers and cosigners

Signs the loan Listed on the title Responsible for paying loan Co-owns the asset Takes on financial risk
Co-borrower Yes Yes Yes Yes Yes
Cosigner Yes No No, unless the primary borrower fails to No Yes

What is a co-borrower?

In real estate, a co-borrower is sometimes also called a “co-applicant.” Co-borrowers’ finances are assessed to the same degree that yours are during the mortgage-application process, and they sign all the loan documents along with you. This person will be just as responsible for the loan and the property as you are; they’re an equal partner in the application and in ownership. 

Many co-borrowers are the spouses or partners of the primary borrowers, but they don’t have to be — a co-borrower could also be a relative or close friend of the primary borrower. For example, friends might purchase a vacation property together as co-borrowers. The only requirement is that they are someone you trust to be as (literally) invested in the property as you are. 

Learn more about buying a house when you're married— or buying a house with a friend.

Benefits of co-borrowers

Having a co-borrower is a way to combine resources in order to get a loan — taking out a joint mortgage is easier when you have two sources of income going toward it, not to mention that it’ll be easier to pay it off if you’re splitting it. It may also help you qualify for a lower interest rate.

But the primary reason to have a co-borrower on a home mortgage is if you want to share ownership of the property with someone else. If that’s not your ultimate goal, then a co-borrower is probably not the best situation for you.

Risks of co-borrowers

Just as a co-borrower takes on the same responsibilities as the primary borrowers, they also take on the same risks. Actions by any of the co-borrowers will affect the others. For example, all co-borrowers are considered equally responsible for late payments. They will also need to keep making payments if another co-borrower on the mortgage passes away.

→ Learn what happens to a mortgage when someone dies

What is a cosigner?

If you need some help qualifying for a mortgage but intend to be completely responsible for it and the property yourself, having a cosigner might make sense for you. A cosigner is your backup: They agree that they will take responsibility for the loan in the event that you don’t or can’t make your payments. Unlike a co-borrower, a cosigner does not have any ownership rights to the property itself. 

Many cosigners are parents or other family members who have more cash or better credit than the primary borrower. 

Benefits of cosigners

A cosigner is essentially vouching for you as a borrower, lending you their credibility. This can be especially helpful if you’re just starting out financially or if your financial profile, on its own, isn’t desirable to the lender and won't pass muster during underwriting.

Even though the cosigner helps you qualify for the loan, they have no ownership claim to the property itself; a cosigner is a good option if you’d like to be the sole owner of the property.

→ What to know about buying a home with credit

Risks of cosigners

For the primary borrower, there are no financial risks to having a cosigner. However, the cosigner is taking on quite a bit of risk. When they cosign a mortgage, late payments by the primary borrower are reflected on their credit report; and the obligation of being a cosigner can be counted against them as a liability should they seek out their own financing.

Because the cosigner is taking on so many risks in order to help the primary borrower get a mortgage, the ideal cosigner is someone who trusts you. If you don’t hold up your end of the deal (paying back the mortgage), the consequences can fall on them. This means that the real risk for the primary borrower is straining a previously close, trustful relationship.

Guaranteed your home sale— and so much more

On top of Orchard’s Home Sale Guarantee, we list, prep, and show your old home after you’re all moved out.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Close more deals with Orchard brokerage

Grow your business and make $50-$70K more per year.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Closing Fees
$0
$0
$0
$0
Other Costs to Consider
$0
Orchard can help you avoid overpaying additional selling and moving costs
$0
$0
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Estimated Net Proceeds
$0
Home Sale Price
$0
Total Cost to Sell
$0
Get my free valuation
Orchard is 30% more accurate than leading estimates.

Sell for more with value-boosting improvements

When you list with Orchard, we’ll get your home show-ready and make repairs to increase your home’s value at no upfront cost.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Closing Fees
$0
$0
$0
$0
Other Costs to Consider
$0
Orchard can help you avoid overpaying additional selling and moving costs
$0
$0
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Estimated Net Proceeds
$0
Home Sale Price
$0
Total Cost to Sell
$0
Get my free valuation
Orchard is 30% more accurate than leading estimates.

Buy a new home knowing you’ve sold your current one

Orchard guarantees your home will sell, so you can buy your next one worry-free.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Closing Fees
$0
$0
$0
$0
Other Costs to Consider
$0
Orchard can help you avoid overpaying additional selling and moving costs
$0
$0
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Estimated Net Proceeds
$0
Home Sale Price
$0
Total Cost to Sell
$0
Get my free valuation
Orchard is 30% more accurate than leading estimates.

Guaranteed your home sale— and so much more

On top of Orchard’s Home Sale Guarantee, we list, prep, and show your old home after you’re all moved out.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Closing Fees
$0
$0
$0
$0
Other Costs to Consider
$0
Orchard can help you avoid overpaying additional selling and moving costs
$0
$0
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Estimated Net Proceeds
$0
Home Sale Price
$0
Total Cost to Sell
$0
Get my free valuation
Orchard is 30% more accurate than leading estimates.

How much can I make selling my home?

Use our home sale calculator to estimate your net proceeds.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Closing Fees
$0
$0
$0
$0
Other Costs to Consider
$0
Orchard can help you avoid overpaying additional selling and moving costs
$0
$0
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Estimated Net Proceeds
$0
Home Sale Price
$0
Total Cost to Sell
$0
Get my free valuation
Orchard is 30% more accurate than leading estimates.

Don’t navigate the market alone

Our Home Advisors are experienced local agents who know how to sell for top dollar and help win your dream home.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Closing Fees
$0
$0
$0
$0
Other Costs to Consider
$0
Orchard can help you avoid overpaying additional selling and moving costs
$0
$0
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Estimated Net Proceeds
$0
Home Sale Price
$0
Total Cost to Sell
$0
Get my free valuation
Orchard is 30% more accurate than leading estimates.

Let’s match you with a real estate agent

All Orchard Home Advisors are experienced agents who know your local market inside and out. Request a consult today.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Closing Fees
$0
$0
$0
$0
Other Costs to Consider
$0
Orchard can help you avoid overpaying additional selling and moving costs
$0
$0
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Estimated Net Proceeds
$0
Home Sale Price
$0
Total Cost to Sell
$0
Get my free valuation
Orchard is 30% more accurate than leading estimates.

Close faster with a cash offer

Did you know cash offers are 4x more likely to be chosen by a seller? Let us help you make one on your next home.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Closing Fees
$0
$0
$0
$0
Other Costs to Consider
$0
Orchard can help you avoid overpaying additional selling and moving costs
$0
$0
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Estimated Net Proceeds
$0
Home Sale Price
$0
Total Cost to Sell
$0
Get my free valuation
Orchard is 30% more accurate than leading estimates.

Know what your home is really worth

Get the most accurate free home valuation — in minutes

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Closing Fees
$0
$0
$0
$0
Other Costs to Consider
$0
Orchard can help you avoid overpaying additional selling and moving costs
$0
$0
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Estimated Net Proceeds
$0
Home Sale Price
$0
Total Cost to Sell
$0
Get my free valuation
Orchard is 30% more accurate than leading estimates.

Curious what your monthly mortgage payment would be?

Orchard Home Loans shops the market to find your best rates.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Closing Fees
$0
$0
$0
$0
Other Costs to Consider
$0
Orchard can help you avoid overpaying additional selling and moving costs
$0
$0
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Estimated Net Proceeds
$0
Home Sale Price
$0
Total Cost to Sell
$0
Get my free valuation
Orchard is 30% more accurate than leading estimates.

Stand out to sellers with a cash offer

A cash offer is 4x more likely to be chosen by a seller. Get qualified today.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Closing Fees
$0
$0
$0
$0
Other Costs to Consider
$0
Orchard can help you avoid overpaying additional selling and moving costs
$0
$0
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Estimated Net Proceeds
$0
Home Sale Price
$0
Total Cost to Sell
$0
Get my free valuation
Orchard is 30% more accurate than leading estimates.

Don’t miss out on your dream home

Make a cash offer now, and Orchard will sell your old home after you move.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Closing Fees
$0
$0
$0
$0
Other Costs to Consider
$0
Orchard can help you avoid overpaying additional selling and moving costs
$0
$0
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Estimated Net Proceeds
$0
Home Sale Price
$0
Total Cost to Sell
$0
Get my free valuation
Orchard is 30% more accurate than leading estimates.

Your dream home is waiting for you

Tell us your must-haves to see personalized home recommendations that meet your criteria.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Closing Fees
$0
$0
$0
$0
Other Costs to Consider
$0
Orchard can help you avoid overpaying additional selling and moving costs
$0
$0
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Estimated Net Proceeds
$0
Home Sale Price
$0
Total Cost to Sell
$0
Get my free valuation
Orchard is 30% more accurate than leading estimates.

The stress-free way to buy and sell

With Orchard, secure your dream home before you list. Avoid home showings, rentals, and double moves.

Learn More