Today, a large percentage of housing is purchased with a mortgage. For many citizens of the Russian Federation, this is the only way to acquire premises. However, in order for the bank to agree to approve the application, a number of conditions must be met. Thus, a financial institution has the right to demand the provision of collateral.
Mortgage co-borrower- this is one of options bank protection. However, not all citizens know what this definition means and what role it plays in the process of obtaining Money. We will talk about who the co-borrowers are, what rights and obligations they have, as well as about the possible requirements for the candidate.
A mortgage co-borrower is a person who is responsible for the loan along with its main holder. Co-borrowers are often attracted by citizens who want to take out a mortgage, but do not have enough income to receive the desired amount. Most often, the husband or wife of the loan holder, if he is officially married, as well as his immediate family, acts as a co-borrower. The Bank always pays attention to the age of the persons appearing in the contract. Pensioners rarely act as co-borrowers on mortgages. If the company agrees to consider them in this role, then only up to 70 years. IN without fail they must continue to work.
In accordance with article 45 of the RF IC, if spouses purchase real estate with a mortgage, the second of them is considered a co-borrower by default.
The law allows you to attract 2 or more borrowers. Banks sometimes set own restrictions. They allow you to attract no more than three co-borrowers under one mortgage program.
Differences from the guarantor
Both the co-borrower and the guarantor for the mortgage on the apartment act as guarantors of the reliability of the main recipient of the loan. They assume the obligation to repay the debt if the recipient of the funds is unable to make a timely settlement. However, the difference still exists. So, the bank can demand the return of funds from the guarantor only on the basis of a court decision. The organization does not have the right to perform an action on its own initiative.
If a person acts as a guarantor for mortgage loan he has no rights to the mortgaged property. In the process of granting a loan, the income of the guarantor is not taken into account. The maximum amount of the amount provided does not depend on them.
Who can act as a co-borrower on a mortgage loan?
The borrower and co-borrower in a mortgage must meet a number of requirements. So, usually the bank agrees to provide money for an apartment to persons who are over 21 years old. Top limit age limit also exists. Usually, funds are not issued to persons over the age of 65.
Cooperation is conducted only with officially employed citizens. The borrower must have income that would allow him to make payments on the mortgage loan. If the main recipient of funds for some reason cannot continue to repay the debt, the obligation to close the obligation to the bank will fall on the co-borrower.
If the main borrower has enough cash to close the obligations to the bank, a thorough check of the co-borrower for eligibility is not performed.
However, in a different situation, in addition to a passport, a person acting in this role will have to provide the following package of documents:
- a completed application form for receiving money for an apartment;
- SNILS;
- income statement;
- a copy of the work book;
- education document.
Less commonly, a financial institution may require a reference from the place of work. The exact list of documents depends on domestic policy financial organization.
Download a sample application form for a mortgage loan:
Rights and obligations
If a person was asked to help in obtaining a mortgage for an apartment, it is necessary to study in advance the rights and obligations of a co-borrower under a mortgage loan. The person acting in this role is responsible to the bank on an equal basis with the main borrower. If he cannot repay the debt due to objective reasons, the co-borrower on a mortgage loan will have to assume obligations to repay the debt.
In practice, potential owners do not always distribute shares equally. In order to separate them in advance, the spouses enter into a marriage contract or additional agreement to the loan agreement.
An agreement between the borrower and the co-borrower can be concluded if the parties to the transaction are not spouses. In another situation, the bank may insist on concluding a marriage contract from the very beginning or in the event of a number of difficulties. So, the need for it often arises when there are delays.
Right to an apartment
Having understood what a mortgage co-borrower means, it is worth familiarizing yourself with the rights and obligations of a person. For the borrower and co-borrower, they are almost identical. The principle of equality also applies to rights to collateral.
However, the fact that one of the citizens automatically becomes the owner of the property applies only to spouses who have officially registered the marriage. And similar rule operates not because a mortgage is issued, but because of the inclusion of property in jointly acquired. Who has what rights to the property, and to whom what part is due, is determined by the agreement of the borrower and co-borrower. Usually it is compiled at the stage of obtaining a loan.
If the document has not been executed, the person helping to repay the loan will have to prove the rights to the property. Actions will be carried out through the court.
It should be borne in mind that the status of a co-borrower does not allow you to claim real estate. However, this person can claim housing or claim compensation if they are denied a share.
By drawing up an additional agreement to the loan agreement, the participants in the transaction will be able to change the responsibility of the co-borrower:
- determine the existing rights to collateral real estate;
- approve the nuances of closing the obligation to the bank;
- change liability from joint and several to subsidiary.
How to stop being a co-borrower?
Having figured out the difference between a co-borrower and a guarantor, it’s worth figuring out how to stop playing this role. The status of a co-borrower is temporary. The person may try to withdraw from the loan agreement. However, it must be understood that this will be quite problematic. This issue will be discussed with the bank.
To exercise the right, you have to sign a waiver of your share of the home. A person has the opportunity to claim compensation.
You need to be prepared for the fact that the bank will give a negative answer. This is standard practice. When issuing a loan, the bank took into account the total income. However, future plans for life together spouses have changed.
Download a sample application for the exclusion of a co-borrower from the loan agreement:
In case of a negative answer, experts advise filing documents with the district court. You must contact the institution that is located at the location of the property. It is mandatory to indicate the reason that led to the need to put forward requirements to change the terms of the transaction.
They may be considered as:
- divorce;
- serious disease;
- planned move;
- job loss.
Practice shows that if the applicant is properly prepared, the court will satisfy the requirements.
Existing risks
The co-borrower of the loan risks in exactly the same way as the main recipient of funds. If we are talking about spouses, there is a risk of losing real estate if the couple cannot continue to pay off the loan. Additionally, there is a possibility of damaging your credit history. The financial burden on the budget may increase significantly. In practice, the co-borrower himself may feel the need for a loan. However, most banks will refuse to provide it.
Some financial institutions force individuals in this role to insure their life and health, which requires additional financial costs.
Based on the foregoing, it turns out that the co-borrower risks in exactly the same way as the main recipient of the mortgage. There is nothing wrong with anyone in the section of credit obligations. However, it is worth understanding existing risks before agreeing to a deal. In a different situation, a person may be faced with the need to repay someone else's loan.
It's no secret that many people want to have a large living space. But own funds for the purchase of other housing is not always enough. Mortgages can help in these cases. To obtain it, very often it is necessary to attract guarantors or co-borrowers. Next, we will figure out who a mortgage co-borrower is, what rights he enjoys and what he is responsible for.
Mortgage co-borrowers - who are they?
Taking out mortgage loans on your own is not for everyone. Therefore, it is often necessary to resort to the help of co-borrowers.
Mortgage co-borrowers, unlike guarantors, act as participants in the main transaction.
In fact, the mortgage transaction in this case is concluded by several persons. And if the main borrower is unable to fulfill its obligations under the transaction, then the credit institution may turn to co-borrowers. From two to five additional borrowers can be involved in the transaction.
Attracting a co-borrower helps to arrange a mortgage for more favorable conditions. Sometimes, without the involvement of such assistants, obtaining a mortgage will be impossible. It is a certain guarantee of loan payments for the bank. Despite the similarity with the guarantee, this type of security for payments on a mortgage loan has its own characteristics. Let's take a closer look at them next.
Mortgage without co-borrower
It is possible to take a mortgage without the involvement of such assistants. Co-borrowers are not a requirement for a deal. But for people who do not have high incomes, obtaining a mortgage is possible only if some kind of security is provided. For this purpose, guarantors or co-borrowers can be involved.
When making a transaction for several persons, there are more chances to receive money, as well as increase the amount of the loan. When deciding on a mortgage, banks evaluate the income of the proposed co-borrower.
A mortgage without a co-borrower is suitable for those individuals who have sufficient income to obtain a loan on their own.
Mortgage co-borrowers: rights and obligations
All rights and obligations of the co-borrower are specified in the concluded loan agreement.
In general, he has the same powers as the main debtor. He participates in the transaction on an equal footing with him, so he gets the opportunity to claim part of the acquired property. In addition, but can expect to receive deductions related to the purchase of housing. His main responsibility is to pay off the mortgage loan. At the request of the credit institution, he must pay the mortgage instead of the borrower. In case of delay in payment, he will also have to pay a penalty and other penalties specified in the contract.
The co-borrower also signs the contract, so his rights and obligations coincide with the powers of the debtor himself.
Rights of a co-borrower to an apartment
Co-borrowers, as participants in the transaction, may well qualify for housing purchased on a mortgage. The transaction is executed for several persons who are equally entitled to receive a share of the mortgaged apartment. In fact, they become co-owners of this housing, unless otherwise provided in the mortgage agreement.
The rights of a co-borrower to an apartment are determined when applying for a mortgage.
Can a co-borrower take out a mortgage?
Co-borrowers undertake to pay the mortgage together with the borrower. Sometimes in this way deals are made by married couples. In some cases, friends, relatives with a good income are involved for this.
But what if the co-borrower himself needs to take a loan, Can a co-borrower take out a mortgage?
A ban on obtaining a mortgage by persons already acting jointly with the borrower under another agreement. Banks in such cases will evaluate it financial condition. If his earnings (other income) allow him to pay for several transactions, then there will be no objections. Most often, credit organizations want to see clients whose mortgage payments will be no more than forty percent of earnings.
How to get out of mortgage co-borrowers
The termination of obligations of co-borrowers is usually associated with the execution of a mortgage agreement. However, there are situations when a person who agreed to the joint signing of an agreement later wants to withdraw from it.
Consider what needs to be done, to get out of mortgage co-borrowers.
- First, this issue should be resolved together with other borrowers and the bank. If they agree to re-registration, then an additional agreement or new documents can be made, which will indicate a different person or offer another way to ensure payments under the contract.
- Secondly, if an agreement is not reached, these issues will have to be settled with the help of the court.
Mortgage co-borrower requirements
Banks are interested, first of all, in getting good income. Therefore, when issuing loans, they carefully study the client. Lenders prefer to make deals with trustworthy borrowers who are able to pay back the money received back to the bank, and even with interest. The identity and financial solvency of the co-borrower is also verified.
Depending on the bank chosen for registration of the mortgage, the requirements for recipients of borrowed funds may also change. Basically, these requirements relate to the age of the client, the level of his income, the absence of problems with payments on previously taken loans.
The age limit is set by banks in the range from 21 to 65 years. Therefore, retirees are unlikely to be approved as co-borrowers.
In addition, applicants are required to have Russian citizenship, work at an existing job for at least six months. The income of the second borrower should be enough to pay off the debt and interest on the mortgage.
Often spouses or relatives act as co-borrowers. But the second borrower may be another person who meets the requirements of the bank.
The additional borrower acts as a full participant in the mortgage transaction.
This means that he shares with the main borrower the responsibility in case of any problems. The details of its occurrence are stipulated by the agreement concluded between all parties. It may occur if the borrower fails to fulfill the terms of the mortgage transaction. In this case, the bank will first have to wait for execution from the debtor himself. And then contact his co-borrower.
The contract can also indicate their joint equal responsibility.
If there are several co-borrowers in the agreement, the bank may apply to each of them with a requirement to fulfill the obligation.
Documents for a co-borrower for a mortgage
To complete the transaction, the co-borrower will need to provide the bank with a package of necessary papers. Their list in different banks may vary slightly. But it usually requires the provision of:
- Passports (other identity documents);
- SNILS;
- certificates of earnings, other documents on income;
- about marital status and persons living with him;
- information about education.
The Bank may also require other documents. Therefore, their full list it is better to check in advance with the bank chosen for obtaining a loan.
What is the difference between a co-borrower and a guarantor?
The involvement of both guarantors and co-borrowers is designed to guarantee the bank to a certain extent the payment of the mortgage. But these individuals have different status and scope of authority.
Guarantors are not participants in a mortgage transaction on an equal basis with the borrower. Therefore, they do not receive any rights to the acquired housing. And they answer when the borrower failed to fulfill contractual obligations to the bank.
When attracting guarantors, their income is not taken into account by banks.
Co-borrowers have more responsibility, but they also acquire rights in relation to a mortgage apartment.
Co-borrowers are subject to the same requirements as the borrowers themselves.
Credit history, risks for the co-borrower
Before you agree to help someone get a mortgage, you should think carefully. After all, this carries certain risks for the co-borrower.
First, he may be required to pay off mortgage debts. This rule also applies if he does not apply for a mortgage apartment. In the event of litigation, you will have to pay not only the debt and accrued interest, but also the penalty, legal costs. If the co-borrower does not have enough money to repay them, then the bailiffs can seize his property.
Secondly, problems with payments under the contract concluded with his participation can negatively affect his credit history. Before making transactions, banks carefully check information about all credit obligations of a particular person.
Important! You should not sign an agreement in the absence of full confidence in the solvency and good faith of the borrower.
In addition, it will be more difficult for a person who is a co-borrower under a mortgage agreement to get a loan for himself.
The execution of other mortgage agreements is not prohibited, provided that the financial condition of the client allows making payments on several loans.
is the only way for most Russian families realize your dream of a separate apartment.
Most often, families take mortgages, and in this case, as a rule, one of the spouses is the main borrower, the second is a co-borrower.
Most people have little idea who a co-borrower is and think that this is the same as a loan guarantor. However, this is not at all the case…
Dear readers! Our articles talk about typical ways legal issues, but each case is unique.
If you want to know how to solve exactly your problem - contact the online consultant form on the right or call the numbers below. It's fast and free!
Who is a co-borrower and why is he needed?
Legislation gives the following definition - a person, responsible for a loan to a financial institution along with the main creditor.
A co-borrower is usually attracted when a citizen who wants to take a mortgage cannot boast of a high income.
In this capacity, the husband or wife of the main creditor most often acts, or another closest relative - father, son, daughter, brother.
Here the age criterion plays a role: for the role of a co-borrower, if they take pensioners, then only those who are at a relatively young age (up to 70 years) and are necessarily working.
If a married couple took a mortgage on square meters after official registration, the second spouse is considered a co-borrower by default (Article 45 of the RF IC).
You can attract more than two borrowers. Usually banks set a limit: no more than three within one mortgage program.
If you want to know to whom banks give mortgages for an apartment, and to whom they refuse, we advise you to read.
What is the difference from a guarantor?
The guarantor and co-borrower act as guarantors of the return of bank funds and the reliability of the borrower.
What are the differences?
- The bank can only foreclose on the guarantor's funds by a court decision and never on its own initiative. If a co-borrower, no court decision is required;
- The guarantor for a loan, even for a mortgage, has no rights to the pledged property;
- At the stage of issuing a loan, the income of the guarantor is not taken into account in any way and the amount of the loan issued does not depend on them.
Requirements for a candidate
As a rule, they are the following:
- This person is at least 21 years old(with a limit on the upper limit of age);
- officially employed;
- Has income enough to cover a mortgage loan(if the main borrower falls ill, the co-borrower will have to pay!).
If the situation is not controversial and the income of the main client is enough to repay the potential loan, then the co-borrower is not strictly checked.
However, in other situations, the bank may request from the partner, in addition to the passport, the following documents:
- The questionnaire of the co-borrower coincides with the questionnaire of the main borrower;
- A copy of the work book;
- SNILS;
- Income statement 2-NDFL;
- Diploma of education;
- Characteristics from the place of work (less often).
The exact list of documents depends on the requirements of a particular credit institution..
We offer you a sample questionnaire for a mortgage loan: Download.
Rights and obligations
The co-borrower is responsible for the loan on an equal basis with the main holder.
If the main client cannot pay the mortgage loan due to objective reasons (for example, a serious illness or disability), the partner will have to assume the main obligations on the loan.
Potential co-owners do not always distribute shares equally.
To determine the shares, a marriage contract or an additional agreement to the loan agreement is concluded.
The contract between the borrower and the co-borrower is concluded if the loan partners are not spouses.
As for the marriage contract, the bank usually insists on its conclusion either from the very beginning, or in the event of a controversial points For example, there were difficulties with late payments.
Right to an apartment
But not only the obligations of the co-borrowers are the same - the principle of equality also works in relation to the rights to the pledged property.
However, the fact that one is automatically a co-owner of housing can only be said in relation to official spouses. And not because it is a mortgage, but because we are talking about jointly acquired property.
Who has what rights and to whom, what part of the apartment is due - is determined by the agreement of the borrower and co-borrower, which is usually signed at the stage of obtaining a loan.
If such a document has not been issued, the loan partner will have to prove his rights to square meters through the court, since the status of the co-borrower itself does not determine anything for sure, except for one thing - this person, or can claim rights to real estate, or receive compensation when registering a refusal of a share in a dwelling.
By an additional agreement to the loan agreement, you can change the responsibility of the co-borrower:
- From solidarity to subsidiarity;
- Approve a special loan repayment procedure;
- Determine mortgage rights.
How to get out of the co-borrowers?
As you know, even marriage ties are temporary, the same can be said about the status of a co-borrower.
You can leave the co-borrowers, but it will not be easy. One initiative will not be enough - it will be necessary to coordinate the issue with a financial institution.
To do this, you must write an application to waive your share in the housing and demand (or not demand, since this is a right, not an obligation) compensation.
We offer you a sample application for the exclusion of a co-borrower from the loan agreement: Download.
It is better to immediately tune in to the fact that the bank will refuse.
No need to be afraid, this is a common practice: a credit institution gave you a loan, believing in your assurances about the total income, but your plans for living together have changed.
In this case, you need to submit statement of claim to the district court general jurisdiction at the location of the property.
Be sure to indicate the reason that made you demand changes in the terms of the transaction - for example, a divorce, a planned move, a serious illness, or loss of a job.
Practice shows that with proper preparation of the applicant, the court always satisfies such a requirement.
Risks
The risks are the same as those of the main borrower.
This is the probability of losing a home, if suddenly the couple is no longer able to fulfill loan obligations, financial burdens, the risk of spoiling a credit history.
Sometimes it also happens that the co-borrower himself will need to take out a loan - most banks simply will not issue it, given the status.
They may oblige the co-borrower to insure their life and health.
So it turns out that the co-borrower risks exactly the same as the main loan holder, the responsibility is exactly the same.
There is nothing wrong with sharing credit obligations with someone, but this is the very case when you should “measure seven times and cut once”.
How to divide the shares of co-borrowers in a mortgage apartment? We suggest you watch the video.
IN currently few fellow citizens have sufficient income to buy their own square meters. And in some cases, it also happens that the income itself is not enough for the bank to issue a mortgage for the purchase of housing. However, in this case, you can find a way out of the situation, because you can attract a co-borrower, that is, an assistant who will help you get a loan.
Credit institutions usually agree to such conditions, because one more responsible person money back is a great guarantee. And for the borrower, this is not bad: both when applying for a loan and in the event of unforeseen problems with debt servicing.
However, for the attracted person, not everything is so joyful, because he bears the same risks of paying off the debt as the recipient of the loan. That is why you should carefully and responsibly approach this issue.
Assistant in obtaining a loan
Mortgage co-borrower a person with equal obligations and rights along with the borrower, including joint and several liability to the credit institution for repayment of debt obligations.
His income when determining the amount of the loan will also be taken into account by the financial institution. This person is quite often involved when long-term loans for large amounts are required. Due to the fact that this particular person, along with the person being credited, is indicated in the contract, then he has the corresponding obligations and rights.
Rights and obligations
From the moment of signing the loan agreement, which stipulates their joint and several obligation, because it is automatically subject to Civil Code of the Russian Federation, namely Article 323 "The rights of the creditor, with a joint and several obligation" according to which:
By the way, we recently wrote an article about the mortgage program. Its conditions may help some to purchase housing.
- 1. A creditor in case of a joint and several obligation of debtors has the right to demand performance both from all debtors and separately from any of them, both in part of the debt and in full.
- 2. A creditor who has not received full satisfaction from one of the joint and several debtors shall have the right to claim the uncollected debt from other joint and several debtors.
- 3. Solidary debtors will remain obligated until the moment they fulfill the obligation in full.
A co-borrower can generally act as an additional borrower in situations where:
- 1. The borrower does not have sufficient income to receive the required amount of a housing or other loan. In this case, the income of the assistant under the loan agreement, confirmed by a certificate, is taken into account when calculating maximum size loan.
- 2. The main borrower has the required income, but is married during the mortgage period. In this case, the spouse becomes the borrower's assistant. It is connected with Art. 45 family code Russian Federation, since the acquired property becomes common, and a guarantee of debt payment is important for a credit institution.
- 3. The main borrower at the time of the loan, as well as in the first years of lending, has no income. For example, a student (applicant), then the loan assistant will repay the loan at this time.
What are the things to think about
- 1. Before you sign loan agreement it is recommended to conclude an agreement on mutual obligations with the borrower if you have to repay the loan, and the assistant is not considered the spouse (s) of the borrower and subsequently does not become a co-owner of the property as a result of the transaction. This condition may apply to friends and relatives of the borrower who decide to help him.
- 2. If the loan is issued to spouses who live in civil marriage and will equally respond to the loan, repay the debt together, it is advisable to indicate in the contract that the acquired property will be registered in the shared ownership of both. Otherwise, you need to use the first paragraph.
- 3. If the spouse (s) does not want to become an assistant under the loan agreement, then it is recommended to use the marriage contract, which specifies in detail this condition so that it suits both the credit institution and the borrower can apply for a loan for the purchased housing.
4. It often happens that the assistant is subsequently denied other loans, because another one will already hang on it. Here, much also depends on the positiveness of the credit history and the amount of the loan. Therefore, it is worth thinking before signing a contract.
Remember: you can always get tax deduction when buying an apartment and get back part of the money spent. How to do this, the editors of the site described the site in detail
What documents should be provided
An assistant for housing loans needs to provide the same documents as the borrower:
Advantages and disadvantages
The pluses here include the fact that you help the borrower fulfill his dream, and if you register the property in shared ownership, then you become its co-owner. Therefore, it is necessary to correctly draw up contractual documents.
The disadvantages include enormous risks if the borrower fails and stops paying the loan. After all life situations can be very varied. There is a risk of losing property and remaining in debt to a credit institution.
What is the difference between a borrower and an assistant
When applying for mortgage loans, banks need to determine who will be the main person under this agreement, that is, who will receive statements, make payments, and so on. In a number of organizations, for the convenience of procedures, the main borrowers are called title borrowers.
As part of the contract being drawn up, quite often the right of ownership of the property is issued specifically to the title borrower. However, this is not a strict rule, because it is also possible to register in the shared ownership of the spouses.
Can a co-borrower apply for an apartment?
Co-borrowers are involved in order to take into account their income for the loan, as well as to simplify the procedure for collecting debt in case of improper performance of the contract.
The composition of the owners of the acquired property is usually indicated in the contract. However, the co-borrower has rights to the apartment if the borrower cannot fulfill his payment obligations and the debt, and he has to pay for it.
Video: How to reduce or increase the share of a co-borrower's apartment?
Purchasing a home on a mortgage is the most common way to improve their living conditions for most of the population in our country and around the world.
When drawing up an agreement, banks impose strict requirements on the level of solvency of the persons being credited.
You can increase the insufficient level of income if you attract co-borrowers who have a reliable income and are willing to share all the risks of lending with the main participant.
A mortgage is a contract between individual and a bank, according to which a financial institution provides a long-term loan for the purchase of housing secured by the acquired property. On the part of the credited party, the contract can be signed not by one person, but by several. Typically, this method is used in cases where:
- the borrower does not have sufficient level income;
- lending participants are legally married;
- the borrower does not meet a number of other requirements (permanent work experience, registration, employment);
- housing is purchased in the name of a minor.
In practice, borrowers resort to the help of outside guarantors or co-borrowers, so it is necessary to be aware of the difference between these concepts.
The rights of a co-borrower under a mortgage are the same as those of the main recipient of the loan, i.e. in the future, he can claim the housing purchased during the mortgage. On the other hand, the obligations of a co-borrower are similar to the requirements for a borrower. He must provide full package the document required for registration of a mortgage, and meet the basic requirements. Persons who have:
- citizenship of the Russian Federation;
- permanent place of work (work experience differs in different banks and ranges from 6 months to 2 years);
- a sufficient level of income (usually it is required that the monthly income is approximately 2 times the amount of the loan payment and there are no other outstanding loans);
- good credit history;
- age limit ( minimum age- 21 years old, and the maximum - from 45 years old, i.e. pensioners and persons retiring during the period of the mortgage agreement cannot become parties to the loan agreement).
Compliance with the listed requirements is documented.
Important: The co-borrower is not required to repay the loan, but if payments stop coming, the debt is automatically transferred to the co-borrower. To transfer the debt to a co-borrower, a court decision for the bank is not required. This provision is specified in the text of the mortgage agreement.
Such high level responsibility leads to the fact that in the role of co-borrowers relatives usually act:
- spouses;
- parents;
- adult children;
- sisters and brothers.
The relationship between the recipient of the loan and the co-borrower is positively assessed by the bank, as this increases the degree of conscientiousness of the lenders and serves as a guarantee of the successful repayment of the loan.
Several co-borrowers may be involved in the execution of one mortgage agreement, their number is limited by the requirements of the bank, but generally no more than 5 people.
Mortgage. Rights of the co-borrower-spouse
Mortgage loans in most cases are issued couples. Forms and participation of the parties in the contract may be different. Before signing the contract, the mortgage co-borrower can find out what rights and obligations he receives as a result.
For example, a loan is issued immediately for two equal conditions. Otherwise, the loan is issued to one of the spouses, and the second acts as a co-borrower. Because all property acquired during family life, belongs to both spouses in equal shares, the rights of the co-borrower on the mortgage on the apartment and his obligations for debts are the same as those of the main borrower.
To avoid disputes when one of the spouses who has entered into a mortgage agreement cannot pay the debt, and the other spouse does not even know about the debt to the bank, employees financial institution usually require the signature of all family members.
If the spouse does not participate in the conclusion of the mortgage agreement, then he or she signs a document stating that they do not make any claims to the property, i.e. waive all rights to the acquired housing in advance. But, in order to avoid possible litigation around mortgage debt, banks prefer to provide loans if the contract is signed by the spouses of the mortgage co-borrowers.
In this case, if the solvency of one of the spouses worsens, the debt is paid by the second spouse, and the acquired housing is in common ownership.
General credit after divorce. Is it possible to withdraw from co-borrowers on a mortgage?
Divorce is always a difficult situation for a family, but with any outstanding loan, especially a mortgage, the divorce process is much more complicated. In the event of a divorce, it is possible various options behavior of spouses, for example:
- husband and wife refuse to pay the loan further;
- if the co-borrower does not pay the mortgage, but does not give up his share in the housing, and the second of the members former family continues to make loan contributions;
- the loan is issued to the wife and is repaid from her account, but in fact the husband transfers the money for payments to this account;
- part of the funds (for example, a down payment) was made at the expense of the premarital property of one of the spouses, and the rest of the payments are made by the other, while each claims the maximum share in the property;
- the family member for whom the loan agreement is drawn up refuses payments and claims for housing, and the second spouse wants to re-register this loan for himself.
These are the most frequently encountered controversial situations but life throws up new variants of problems every day.
There are several ways to resolve a conflict situation:
- pay the mortgage amount (if funds allow or there are not many payments left), and then divide the property through the court;
- find a buyer for mortgaged housing, who will agree to pay the entire amount to the bank and pay off the mortgage;
- to conclude a settlement agreement according to which to distribute property, debts and children, taking into account the interests of all family members;
- apply to the court and resolve the issue of division of property and debts through court proceedings.
In the last two cases, the documents received (settlement agreement or court decision) must be presented to the court and an application should be written about the withdrawal of one of the co-borrowers from the mortgage agreement.
Unfortunately, the bank, as an equal party to the agreement, is not obliged to consider and accept the submitted documents for execution and may not agree to change the agreement. In most cases, divorce and further actions of former spouses threaten litigation and deterioration in loan payments, so banks very rarely agree to withdraw a co-borrower from a mortgage. Usually, the bank can force only the risk of losing its funds and defaulting on the loan to take such steps.
The chance to reissue a mortgage to a co-borrower arises when refinancing a mortgage and transferring it to another bank, since in this case a new contract is signed. If at the time of its signing the borrowers are not married, and the level of income of one of the participants is sufficient to repay the loan, then it is possible to conclude a mortgage on new terms without involving a co-borrower.
Healthy: Since the probability of withdrawing from the co-borrowers is low, it is recommended that the spouses enter into an amicable agreement among themselves, and after the payment of the loan, formalize the ownership on its basis or by a court decision.
In cases where, when concluding a mortgage, one of the parties immediately pays a significant amount, for example, 25% of the cost, then it is worth immediately indicating that such and such a share of the property belongs to this person, and save financial supporting documents. Part of the area paid under the mortgage agreement will be divided equally between the spouses as family property.
A pre-marital mortgage in a divorce in most cases remains with the spouse who entered into it, but the other half may require reimbursement of half of the funds paid during the joint residence.
If there is a mortgage upon divorce, and former spouses co-borrowers will not be able to reach an agreement and will refer the issue to the court, then it is impossible to unambiguously predict the outcome of the case. The court takes into account the interests of not only spouses, but also children, as well as other circumstances, for example, the state of health, the availability of other housing, and so on.
Special cases of mortgage division in the presence of a co-borrower
There are options in which the issue of the division of property taken on a mortgage is resolved according to special rules. This applies to all cases where part of the mortgage is paid out of trust funds, as well as in the event of bankruptcy of one of the debtors.
Maternal capital
Main use maternity capital is the improvement of living conditions. Amounts from the Pension Fund directly go to the bank at various stages of mortgage payment, including:
- as a down payment;
- to pay off a previously concluded contract.
From the point of view of legislation, the time of receipt does not matter. A significant difference is obtained if an apartment is divided in a mortgage during a divorce, when one of the spouses wants to leave the co-borrowers. The difficulty lies in the fact that when using maternity capital to pay for housing, parents are required to assign the appropriate number of square meters to their children.
The most correct decision is to immediately determine the common property for all family members when applying for a mortgage. In this case Pension Fund will not be able to present claims upon re-registration of property. It is impossible to redistribute square meters during the mortgage period, if a co-borrower and maternity capital are involved, since the housing is pledged to the bank, and if the apartment is sold without fulfilling a mandatory condition, the PF may request the return of maternity capital, as used for other purposes.
Bankruptcy of a co-borrower
Enough big problems with mortgage payments if the borrower or co-borrower is declared bankrupt. According to the law, all the property of a bankrupt, except for housing, which is the only place to live, falls under arrest and is subsequently sold to pay off the debt.
There is a nuance according to which an apartment pledged to a bank does not have the status of the only object of residence, i.e. it falls under the requirements of bankruptcy laws. Despite the fact that the mortgage object is already pledged, banks are usually unwilling to take risks and offer borrowers to pay off the loan without waiting for the payment to be due.
Important: The subject of the mortgage, if the bankruptcy of the mortgage co-borrower is established, is put under strict control, and at the first occurrence of debt, the process of selling the apartment to pay off the loan debt begins.
An exception is made only in cases where the main borrower has a sufficiently large and stable income.
military mortgage
There is another way to obtain housing - this is a military mortgage, when the state pays the full or partial cost of housing to military personnel. If government payments are not enough to fully secure the loan, the borrower can attract a co-borrower with additional funds, usually the wife. If both spouses are military personnel, they can draw up one mortgage agreement and pay for it at the expense of double state financing.
Difficulties in securing a co-borrower's share arise if a military mortgage apartment becomes the subject of a dispute during a divorce, for example, one of the spouses wants to stop participating in the payment of the mortgage.
Due to the fact that a military mortgage is targeted financing, a spouse who is not a military man does not have the right to become the owner of an apartment before her full payment and registration of property documents.
After full payment, the apartment can be sold, donated to the second spouse, children or strangers, but the soldier no longer has the right to re-register the mortgage.
How to prove that only one borrower pays the loan
For the division of property in the event of a divorce, in most cases it is necessary to prove who exactly and from what income pays the mortgage. Despite the fact that all property acquired during family life must be divided between the spouses, the court may decide otherwise, for example, to determine different shares.
There is only one way to prove the fact that there was a sole paid mortgage after a divorce - to present documents:
- on loan payment;
- on the sale of personal non-family property prior to the mortgage, if the funds were used as a down payment;
- documentary evidence of the second spouse that he did not participate in the payment.
From this point of view, the most indisputable method of payment is the transfer of credit funds from a salary card.
The most difficult case to prove is when funds are received from the account of one spouse in accordance with the mortgage agreement, while the receipt to this account is provided by the other spouse. In this case, it is necessary to keep all payment orders or receipts for the transfer of funds.
Evidence can be a receipt of receipt of funds for payment, a promissory note, a marriage contract or other documents drawn up between the spouses.
The conclusion of a mortgage with the involvement of a co-borrower can cause sharp contradictions between the parties to the agreement, most of which are resolved only in court.
