Definition
A second person who applies for a loan alongside the primary borrower, shares ownership of what it buys, and is equally responsible for repaying it. Unlike a cosigner, who only guarantees the debt, a co-borrower's name goes on the title and the loan reports on both credit files.
Why it matters
Adding a co-borrower can combine two incomes to qualify for a larger mortgage or a better rate, but it also ties both credit reports to every payment and makes untangling the loan after a breakup or divorce a refinance problem, not a paperwork problem.
Example
Two partners each earning $60,000 apply together for a $350,000 mortgage that neither could qualify for alone. The loan appears on both credit reports, and both are on the deed. If one later wants out, the other must refinance the full $350,000 in their own name, which means qualifying on a single $60,000 income.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.