What rights does a mortgage co-borrower have?

January 2019

Mortgage lending to the population is a profitable income item for the bank, because the amount is taken for a long time and at considerable interest. At the same time, the company is not insured against financial risks. This happens when a client refuses to pay a debt. To protect itself, the organization insists on attracting guarantors of compliance with the terms of the transaction, putting forward this requirement as a prerequisite when signing the contract. A co-borrower on a mortgage loan in the eyes of the bank is a person who bears the same responsibility for repaying the loan as the main debtor.

Who is a co-borrower?

A person who expresses a voluntary desire to fulfill financial obligations to the bank on an equal footing with his client, who has issued a mortgage for the purchase of real estate, is called a co-borrower in legal terminology. This type of liability is joint and several. Within the framework of the current legislation, credit institutions have the right to insist on attracting at least 4 citizens in this capacity (except for the owner of the mortgage). The main requirement for each of them is the ability to repay current payments instead of the main client.

The company that executed the contract has the right to demand this from each of the co-borrowers, who in return can claim a share of real estate as its potential owners. Its value is equivalent to the amount paid for the main debtor in monetary terms. The final decision on the approval of the candidate is made by the bank.

Mortgage co-borrower requirements

Depending on the chosen loan program, the conditions under which a person can assume the rights and obligations of a co-borrower may differ slightly. At the same time, it is possible to single out a single set of requirements stated by the majority of banking organizations:

• the presence of a Russian passport;
• financial solvency - it is necessary to have a stable official source of income that can not only cover the amount of monthly mortgage payments, but also double their amount (at least);
• the minimum work experience in one enterprise must be at least six months;
• compliance with age restrictions - as a rule, this range is from 21 to 65 years;
• the person must not have the status of a pensioner;
• impeccable credit reputation.

A number of institutions are ready to make exceptions for some items, for example:

• give a loan to a foreign citizen if he proves that he is financially secure;
• increase the age limit;
• provide an additional package of services, making it a prerequisite for receiving money.

Who can be a co-borrower?

What is the role of a co-borrower in a mortgage, and who is entitled to take on such responsibility? Theoretically, this can be done by any person who is invited by a potential property owner - a close relative or family member (or just an acquaintance). The main thing is that it fits into the following framework:

1. Had an official job.
2. Stable income.
3. He did not take other large cash loans.

Most often, this role is played by spouses. After all, it will not be easy to persuade a stranger to take such a step. As for the banks themselves, they also more preferentially refer specifically to family ties in the aspect of civil guarantee. As a rule, the requirements for the candidate in this case become minimal.

Rights and obligations

Before taking such a step, a person, be it an outsider or a close relative, should understand the full measure of responsibility that he assumes from the moment his signature is under the mortgage agreement. Before you confirm your agreement with the document, the contract must be carefully studied, since it is it that is the normative act that regulates the rights and obligations of the borrower for the entire duration of the transaction. Consider the standard package of contractual obligations:

• exactly fulfill all the clauses, requirements and conditions of this agreement, including the right of priority for making payments, if there are several performers;
• timely make current payments to the settlement account of a banking organization, if the main debtor or persons in the first place, for a number of reasons, are not able to make payments within the current schedule;
• sign an additional agreement between the debtor and the co-borrower - this is done only in situations where they are not close relatives.

Reference! Young families, and they are often the main mortgage clients, should formalize their status before applying for a loan.

Along with the obligations, the mortgage co-borrower has the right to:

• for a share of real estate purchased in this way;
• issue a voluntary renunciation of joint ownership of housing (while maintaining in full its contractual obligations to repay the debt);
• when dissolving a marriage, insist on the division of the remaining amount of money between the two spouses;
• in the event that the debtor is not able to pay the loan, insist on a fair distribution of the debt priority between all parties to the agreement on a monthly basis;
• receive a tax deduction in monetary terms in a situation where all participants in the process are equal share owners of the apartment;
• refuse this status if he can find a full-fledged alternative.

Can a co-borrower take out a mortgage or a loan?

Life situations sometimes develop in such a way that the mortgage co-borrower himself can act as an applicant for a loan for personal needs. In this case, what are his chances that the bank will approve such a request? Let's look at it through the eyes of a credit institution. A person already has certain obligations. Will he be able to financially pull another debt? Most likely, trying to secure their capital, such an applicant for a loan will be refused.

If a citizen already has a good credit history and is able to convince the company's employees of his financial security and the ability to pay amounts much larger than that indicated in the mortgage agreement, he can be met. Experts recommend applying to the same institution where the person is already acting as a co-borrower and providing as much documentary evidence of their reliability as possible. And if the organization values ​​him as a regular and stable client, you can count not only on the approval of the application, but also on more loyal interest, because most banks are trying to keep their users - including more profitable offers.

As practice shows, a fairly large number of people have several expensive loans at the same time.

What documents do co-borrowers need to collect?

The candidate for this role will need:

• a civil passport or other document capable of proving his identity, such as a military ID or driver's license;
• paper proving the existence of registration - this is necessary in cases where the region of residence of a person and the place where he plans to participate in the transaction are different;
• certificate of pension insurance;
• employment history;
• diploma of received education;
• salary certificate;
• passports and birth certificates of all minors - meaning those who will be registered in this apartment.

Also, the co-borrower has the right to defend his interests in the courts if he believes that they are infringed, or the terms of the contract are not observed. In this case, he will need to prove his innocence documented. For evading direct obligations, the current legislation provides for liability - this can be both administrative and criminal punishment, if unlawful actions are associated with aggravating circumstances.

How can a co-borrower get out of a mortgage?

Is it possible to change the co-borrower and withdraw from contractual mortgage obligations? The answer is yes, but with one caveat - you must obtain the consent of the credit company that executed the transaction. In addition to this option, there are other legal ways to free yourself from mortgage debt dependence. As you know, all obligations expire only after the entire amount under the loan agreement is fully repaid. If the mortgage is in the current stage, then everything is much more complicated.

To do this, a person must personally appear at the bank and write a corresponding application. Of course, it will be difficult to immediately achieve a positive result. Such actions of the company are argued by the fact that the rate of return of the co-borrower was assessed against the background of the material solvency of the main debtor. Thus, a situation may arise that in the event of the client's insolvency, exclusion from the contractual obligations of the co-borrower may cast doubt on the possibility of further payments on the mortgage. The bank in such a situation is at great risk.

The reason that can convince the company's management to meet the applicant halfway must be weighty, for example:

1. Divorce.
2. Diagnosis of a serious disease that requires large financial costs for treatment.
3. Judgment.

The ideal and simpler solution is to find a replacement. The candidate will be checked for creditworthiness and compliance with the requirements stated by the company. After the applicant is approved, the bank will give an official conclusion and withdraw the former co-borrower from the contract. By law, he has no more than 10 days to do this.

If attempts to negotiate are unsuccessful, the alternative is to file a claim with the court.

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