Co-borrower is an individual attracted by the borrower to increase the total income on the mortgage loan and increase loyalty to Sberbank. According to the law, he fulfills the same obligations as the main payer. If a difficult financial situation arises, responsibility for payments passes in full to the co-borrower, unless otherwise specified in the additional agreement.
You can attract additional participants to the transaction for all lending options, except for the “Military Mortgage” and “Mortgage with State Support” programs.
The information presented is required reading for all potential borrowers and co-borrowers.
Is there a difference between a co-borrower and a guarantor?
| Mortgage debt, rub. | Monthly savings, rub. | Refinancing costs | ||
| — 1% | — 2% | — 3% | ||
| 1 million | 500 | 1000 | 1500 | 15500 |
| 1.5 million | 800 | 1600 | 2400 | 21000 |
| 2 million | 1050 | 1600 | 3100 | 26500 |
| 3 million | 1600 | 3200 | 4600 | 37500 |
| 4 million | 2150 | 4250 | 6300 | 48500 |
| 5 million | 2825 | 5560 | 8250 | 59500 |
| 6 million | 3500 | 6870 | 10200 | 70500 |
Often the guarantor is confused with the title co-borrower, who becomes an individual who registers the living space as common property and accompanies all stages of lending. In most cases, this will be the borrower's spouse.
Responsibilities of a co-borrower under a mortgage
Both parties to the transaction have equal responsibilities under the mortgage agreement. The co-borrower cannot refuse to repay the borrower's debt. Their main responsibility is to timely transfer funds through mobile online banking to a loan account or self-service terminal.
Responsibility for payments is specified in the loan agreement. If the borrower is unable to pay his financial obligations, the co-borrower is obliged to help him.
Rights of a co-borrower under a mortgage at Sberbank
If the loan agreement states that the co-borrower is entitled to a share of the apartment, then it is determined jointly with all parties to the transaction. If this right is not specified, then the participant in the procedure must go to court, providing receipts for the payment of mortgage payments.
Is it dangerous to become a co-borrower on a mortgage?
If the borrower finds himself in a difficult financial situation and can no longer make mortgage payments, all responsibility passes to the co-borrower. Therefore, before signing the contract, the latter needs to assess his own financial situation.
If the co-borrower is unable to fulfill payment obligations, then he will need to transfer his share of the real estate to Sberbank. The money received from the sale will be used to pay off the loan debt. If this is not enough, the bank may also require the client to sell personal property, close deposits or withdraw funds from securities.
Criminal schemes in which the co-borrower acts as a victim are also possible. The fraudster offers a fairly large sum for signing a mortgage agreement, and after receiving the loan, disappears in an unknown direction. In this case, payment obligations are transferred to the co-borrower.
Undoubtedly, acting in this role is a huge risk, which can result in not just a fine, but also arrest. By agreeing to help his relative, a citizen may lose not only his share in the mortgaged apartment, but also lose his personal property.
Before signing the agreement, it is important to study the clause with the rights and obligations of co-borrowers under the Sberbank mortgage, especially paying attention to the distribution of shares.
Rights and obligations
The rights of a co-borrower under the terms of a mortgage loan must be stated in the loan agreement.
This person will be the full owner of the purchased property, along with the borrower. Also, such a person has the right to apply for a property deduction, which is realized when purchasing real estate.
The responsibilities assigned to the additional borrower must also be specified in the agreement. The main point here will be the timely and high-quality fulfillment of debt obligations. It is possible to indicate in the documents who will make monthly payments. This can be the borrower or all participating parties in equal shares. Failure by the borrower to fulfill its obligations will result in all responsibility being placed entirely on the co-borrower.
In what cases is a co-borrower needed for a mortgage?
The more participants in the mortgage agreement, the higher the confidence of the lender. The bank believes that the presence of co-borrowers is a guarantee of timely repayment of funds.
They are attracted to increase monthly income. The maximum loan amount is calculated based on the financial capabilities of the borrower. By attracting a co-borrower, the bank's confidence increases and the mortgage grows.
For example, Nikolai’s salary is 40 thousand rubles, his income is not enough to approve the requested amount. He attracts his wife with a salary of 27 thousand rubles as a co-borrower. The total family income is 67 thousand. So Nikolai’s wife helped him get an additional 200,000 rubles on credit.
Important! Before applying for a mortgage, you must calculate your preliminary monthly payment. On the DomClick website, the required salary level is indicated for each calculation. Based on the data provided, you can determine in advance whether the applicant needs a co-borrower.
What does the term title co-borrower mean?
In legislation, the title co-borrower in a mortgage is the main borrower specified in the mortgage agreement (Federal Law of July 16, 1998 N 102-FZ On Mortgage (Pledge) of Real Estate). The title, that is, the main payer of the mortgage loan, acquires real estate on the same rights as other co-borrowers and is responsible with its property and all income received in case of violation of the conditions listed in the executed agreement.
Who can become a co-borrower on a mortgage? The official spouse is always taken into account as a mandatory co-borrower. If the relationship between a common-law husband and wife is not formalized legally (at the registry office), then they will not be able to take advantage of preferential programs or take out a housing loan at a reduced interest rate. The following may be involved as a co-borrower:
- A close or distant relative (sister, brother, father, mother or other person related to the main recipient of the loan).
- Third party - any citizen of the Russian Federation who has agreed with the terms of the transaction and voluntarily takes part in it.
If the title borrower and the co-borrower are related, then the chances of getting a long-term loan increase significantly. The approval rate in this case is high. Many banks allow the transaction to take place provided that the title co-borrower is in a common-law marriage. Transactions involving a third party or common-law spouse as a co-borrower have become widespread.
Under what Sberbank mortgage programs can you add a co-borrower?
Expert opinion
Irina Bogdanova
Work experience at Sberbank for 12 years.
A co-borrower can be involved in all mortgage loans, except for “Military Mortgage” and “Mortgage with State Support”. This opportunity is also provided under the “Young Family” program, but on the condition that a title co-borrower with whom the borrower is married is involved.
It will be easier to buy an apartment in a new building or on the secondary market if the mortgage is taken out jointly with loved ones and relatives.
Who can act as a co-borrower?
What is the role of a co-borrower in a mortgage, and who has the right to take on such responsibility? Theoretically, this can be done by any person who is invited by the potential owner of the property - a close relative or family member (or just an acquaintance). The main thing is that it fits into the following framework:
- Had an official job.
- Stable income.
- Did not take out other large cash loans.
Most often, spouses play this role. After all, persuading a stranger to take such a step will not be easy. As for the banks themselves, they also preferably treat family ties in the aspect of civil guarantees. As a rule, the requirements for the candidate in this case become minimal.
How to become a co-borrower on a mortgage at Sberbank
To act as a co-borrower, you must fill out the appropriate section of the application form when applying for a loan. Before submitting an application, it is important to check that the person involved meets all Sberbank requirements.
Requirements
In practice, the applicant’s relatives, in particular spouses, parents, children, brothers and sisters, become co-borrowers. Sberbank allows you to attract up to three people. While in an official marriage, the wife or husband becomes the title co-borrower, unless otherwise specified in the marriage contract.
Basic requirements for a co-borrower on a mortgage at Sberbank:
- Availability of citizenship and registration in the Russian Federation.
- The age of the co-borrower on a mortgage with Sberbank is from 21 years to 75 years at the time of the last payment.
- Work experience – more than six months at the current place of work. Total work experience – 12 months over the last 5 years.
- Mandatory proof of income and employment. The lender requires a certificate in the form of a bank or 2-NDFL. You must also provide a certified copy of your work record.
A mandatory requirement of the bank is confirmation of the legal capacity of the person involved. Recently, cases of fraud have become more frequent: citizens without a fixed place of residence who are addicted to alcohol or drugs act as co-borrowers.
If at least one of the conditions , the co-borrower's candidacy will be rejected.
Package of documents
At the stage of completing a mortgage application, it is necessary to present documentation not only of the borrower, but also of the co-borrower. If you apply online, attach high-quality scans to the appropriate section of the web form.
List of documents for a mortgage co-borrower:
- Passport with registration mark.
- Second document (TIN, VU, SNILS).
- Certificate of marriage and birth of children.
- Certificate in the bank form or 2-NDFL for the last six months.
- A copy of the work record provided and certified by the employer.
Consequences for a co-borrower in the event of bankruptcy of the main borrower
The main consequences for joint borrowers in the event that the main borrower stops paying mortgage obligations are:
- accrual of penalties, fines and penalties provided for in the contract;
- the lender has the right to demand early repayment of the remaining amount of the mortgage along with any interest due.
- the possibility of transferring debt to third parties, most often we are talking about collectors;
- by a court decision, the creditor may demand the seizure of other property of the co-borrower/s, from the sale of which it is possible to repay the resulting amount of debt of the borrower under the mortgage agreement;
- in case of refusal of the borrower's mortgage obligations, the lender will forward all claims to the co-borrower (co-borrowers) or guarantors.
- failure to pay one mortgage debtor negatively affects the credit history of all debtors.
If the borrower is declared financially insolvent by the court, the co-borrower will face the following consequences:
- the contract with co-borrowers is automatically terminated;
- mortgaged housing will be sold at auction;
- those living in mortgaged housing will be evicted “to the street”, regardless of their age, status, etc.;
- If the property of the main debtor does not satisfy the requirements of the mortgage lender, then the property of the co-borrower may also fall into the bankruptcy estate in the bankruptcy case.
In order not to take the situation to extremes, it is necessary to consult with lawyers in a timely manner. Our company provides consultations both online and offline at the telephone numbers and addresses listed on the website.
The procedure for drawing up a questionnaire for the bank
A separate application is not submitted for the co-borrower. All data is entered into the borrower’s application form on the official DomClick website or at a bank branch, together with an employee.
In the online version of the application, the paragraph with information about the co-borrower is final. After filling out all the fields and attaching the required documents, the applicant can submit the application for review.
After registering the application, the document will be reflected in your Sberbank Online account. Each applicant will be able to track the status of their application here.
How do banks review mortgage applications?
The easiest way to apply for a mortgage is online. Fill out the form and wait for a response. Bank employees will check your solvency, assess your credit load and credit rating. If the monthly payment amount exceeds 40% of the family income, banks will refuse. But a lot depends on the bank’s credit policy. Some companies are ready to issue loans when the monthly payment amount does not exceed 50%.
Banks assess the client's solvency based on monthly family income, the presence of additional loan obligations and the cost of living for each family member. If you already have a loan and have to fulfill obligations to another bank, the new lender will calculate the loan load taking this into account.
For example, you work alone in your family and earn 100 thousand rubles, but you have a loan and the monthly payment is 20 thousand rubles. The mortgage will be denied because you cannot pay the mortgage of 20 thousand rubles. The average monthly mortgage payment for residents of Moscow and the Moscow region is 50-60 thousand rubles.
Is one of the spouses an automatic co-borrower?
The spouse who is officially married to the applicant automatically becomes the title co-borrower. The requirement is valid only in the absence of a marriage contract.
When filling out an application, the spouse’s details are automatically entered in the “Co-borrower” column.
If a marriage contract has been drawn up
If the marriage contract states that the spouses do not claim each other’s property, then the status of co-borrower is not automatically awarded. The conditions specified in the document are officially certified by a notary, therefore they are not subject to appeal in court.
Refusal of the co-borrower from his obligations
Can a co-borrower refuse to participate in a mortgage transaction after concluding a loan agreement? The situation is rare, but possible. In order to unilaterally remove voluntarily assumed loan obligations from a co-borrower, there must be compelling reasons.
For example:
1. unsustainable credit conditions, with inflated payment requirements;
2. change of place of residence;
3. divorce;
4. court decision.
To remove your authority, you need to send a corresponding application to the bank to terminate the contract, and then go to court with a well-drafted statement of claim.
| List of documents attached to the statement of claim | |
| 1. | Loan agreement |
| 2. | Statement of funds in the account, their movement |
| 3. | Application for termination of the loan agreement |
| 4. | Correspondence with a banking organization |
| 5. | Copies of documents of the participants in the case |
| 6. | Relevant evidence |
| 7. | Power of attorney for the guarantor participating in the process |
| 8. | Receipt for payment of state duty |
The bank may require you to connect another co-borrower, provided that his candidacy passes the solvency check. A situation with an exception without replacement is also possible - the borrower will need to confirm his solvency by providing a certificate of real income.
You may be interested in: “Mortgage Down Payment: How Things Are Stuffing in 2021”
What to consider when making a decision
Before becoming a co-borrower on a mortgage, you need to ask the question: “Am I ready to repay the loan in full for a friend/brother/godfather/matchmaker?” By signing the agreement, the borrower agrees to be responsible for someone else's debt. Therefore, it is important to study each clause of the contract, discuss with the borrower the details of payment and the circumstances under which responsibility passes to the co-borrower. The agreement can be made in writing and notarized.
Taking out insurance as a way to reduce risks
For their own protection, the co-borrower and the borrower must take out a life insurance policy. It is concluded in case of death, illness and loss of ability to work.
For the main borrower, this is an opportunity not to spoil their own credit history and trusting relationships with the involved parties to the transaction. Similar to an insurance company.
Registration procedure:
- Inform the bank employee of your desire to issue an insurance contract.
- Study the documentation provided and decide on the tariff plan.
- Pay the insurance premium.
Insurance cases and tariffs:
- Death, deterioration of health and involuntary loss of work - 3.6% per year.
- Death and health problems - 2.4% per year, when choosing additional parameters - 2.6% per year.
Will the bank oblige the co-borrower to repay the loan if the title borrower dies?
A mortgage is a long-term loan that is issued for a term of up to 30 years. During the payment of the mortgage, various force majeure circumstances may occur to the parties to the transaction. The primary payer may lose his job, become seriously ill, or die. Let's consider whether the co-borrower pays the mortgage upon the death of the borrower and what obligations pass to the heirs of the deceased payer.
We recommend reading: Who pays the mortgage after the death of the borrower
Of course, after the death of the title borrower, mortgage debts are not written off; they will have to be repaid. Other people will have to repay the loan. There are three possible scenarios:
- The relatives of the deceased payer entered into an inheritance, then the obligation to pay the mortgage passes to them.
- If the deceased does not have heirs, or they did not declare their rights in due time, then the co-borrowers and guarantors who took part in the housing loan will have to pay the mortgage.
- The insurance company will pay part of the mortgage debt if the deceased borrower insured his life when taking out the mortgage, and the insured event meets the conditions.
If close relatives of the deceased borrower accepted the inheritance, then, due to the death of the main payer, the bank may meet halfway and offer them to restructure the mortgage. It is possible that the lender will provide a deferment in debt repayment, but banks rarely agree to such concessions. If the heirs do not make payments on time, the financial institution will go to court to collect the remaining amount of the debt.
Each of the co-borrowers will definitely have to pay the mortgage if the heirs of the real estate do not show up. In a situation where the borrower took out the mortgage alone, without involving co-borrowers and guarantors, and no one accepted the inheritance, the mortgaged apartment will become the property of the financial institution. The bank will sell the property at auction, and the debt will be repaid.
If the deceased borrower was legally married, then the obligations associated with repaying the remaining debt will pass to his wife. When several co-borrowers appear in an agreement, their rights are listed in such a document. Suppose the main borrower took out an insurance policy, and his sudden death was covered by the insured event. Then the co-borrowers will pay off their part of the debt. The remainder of the debt for the deceased borrower will be paid by the insurance company with which the agreement was concluded.
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Author:
Mortgage specialist Maria Yurievna Sokhan
Date of publication August 17, 2019 August 17, 2019
How to get a co-borrower out of a mortgage at Sberbank
To remove a co-borrower from the list of participants in the agreement, the main payer must submit an application to change the terms of the loan according to the bank's model, indicating an objective, compelling reason for such a decision. With his departure, the trust of the credit institution also decreases, so it is necessary to attract a new one to increase the creditor’s loyalty.
The following must be attached to the form:
- Original and copies of the passport of the borrower, co-borrower and the person involved.
- Certificates of marriage, divorce, birth of children or death of all parties to the transaction.
- Marriage agreement for all participants (if any).
- Income certificates (for the borrower and the introduced co-borrower).
Up to 10 working days are allotted for consideration of the application. If the answer is positive, you must visit the bank branch for re-registration.
Sample application for exit
To change the composition of participants in a mortgage loan, you must fill out an application for their withdrawal.
Removal from debtors upon divorce of spouses
Upon divorce, it is possible to remove the former spouse from the list of debtors only if the following conditions are met:
- the form of ownership of a mortgaged apartment is determined by the court, a notarial agreement, or a marriage contract;
- after the withdrawal of the co-borrower, the total income of all participants in the transaction meets the bank’s requirements.
If the lender decides that the procedure will negatively affect the repayment of the home loan, it may require the introduction of a new co-borrower.
Who is a co-borrower?
A person who expresses a voluntary desire to fulfill financial obligations to the bank on the same basis as its client who has taken out 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 current legislation, credit institutions have the right to insist on engaging at least 4 citizens in this capacity (except for the mortgage owner himself). The main requirement for each of them is the ability to repay current payments instead of the main client.
The company that executed the agreement has the right to demand this from each of the co-borrowers, who in return can claim a share of the 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.
conclusions
Co-borrower is an individual engaged to increase Sberbank’s loyalty when applying for a mortgage loan. Up to three participants can be included in the loan agreement, provided that they meet all the requirements of the banking institution.
The co-borrower’s salary is added to the borrower’s income, thereby increasing the credit limit for the purchase of an apartment. Attracting additional participants is an optional condition of the bank.
Sberbank also allows its clients to change and remove participants from the loan agreement. To do this, you must fill out an application at a bank branch, indicating the objective reasons for this decision.
What documents does a co-borrower need to collect?
A candidate for this role will be required to:
- a civilian passport or other document that can verify his identity, for example, 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 completed education;
- salary certificate;
- passports and birth certificates of all minors - this means those who will be registered in this apartment.
Also, the co-borrower has the right to defend his interests in court if he believes that they have been infringed or the terms of the agreement are not observed. In this case, he will need to prove his case with documents. For evasion of direct obligations, the current legislation provides for liability - this can be both administrative and criminal punishment if illegal actions are associated with aggravating circumstances.
Algorithm of actions for obtaining a mortgage with one working person in the family
- Prepare all income documents in advance, take a 2-NDFL salary certificate.
- Find out your credit rating yourself and order a statement from the BKI. If your credit history is damaged, you will be denied a mortgage. To improve CI, take an installment plan for goods, get a credit card, or take out a minimum loan from a bank. Pay off your debts on time. The information will be transferred to the BKI, which will improve your credit rating.
- If your credit history is in perfect order, find a bank with an attractive mortgage rate and apply. It’s not worth sending out 5-6 applications at once, because banks use a special program that awards points. If all banks refuse you when you apply, this will be a negative signal to other banks.
- If the bank refuses to apply for a mortgage due to low income, attract a co-borrower with a positive credit rating.
Please indicate all additional family income in your application.
The bank is not a tax office, so if you have additional income, be sure to indicate this in the application form. Managers will not share information about your additional income, but you will increase the chances of your application being approved. For example, you take a part-time job home and keep all the profits for yourself. You don’t report to the tax office, so you’re afraid to reflect this information on the application form. Bank managers will not contact the tax office, but will mark this information as additional income. Documentary proof of additional income is not required.
Read the article “Nothing to pay for a mortgage: how to get out of the situation?”
Where can I get a notarized document?
You can fill out this form yourself or contact a notary. When filling it out yourself, you must carefully enter your passport details, addresses and dates. After filling out, you need to contact a notary company to certify the form .
If you contact a notary directly, he will take care of the filling. At the same time, the client has a guarantee of a correctly completed document. In case of an error, the lawyer will bear responsibility independently. Will reissue the document free of charge.
Uncertified forms have no legal force.
Obstacles that a co-borrower may encounter
Before becoming a co-borrower, you need to weigh the pros and cons. It might happen like this:
- When paying off your mortgage debt, you will urgently need funds, and you won’t be able to get them from the bank. The main reason for refusal is that wages do not allow paying off two loans at the same time.
- A friend persuaded me to act as a co-borrower on a mortgage loan. We agreed to repay the loan one by one. But the friend could not fulfill his obligations.
- The young people plan to legalize their relationship in a few years. They take out a mortgage for an apartment while in a civil marriage, but do not draw up an additional agreement. Six months later they quarrel and separate. As a result: one of the failed spouses owns the property, and the other pays off the debt. Of course, this issue can be resolved in court, but it is better to take everything into account at once.
- When making a transaction, spouses are obliged to register the real estate as joint property. If the marriage is dissolved, it is necessary to change housing, and in the current situation this is not easy to do.
- When the need arises to get rid of co-borrowers, you need to go through a complex procedure: find a person whose salary is not lower than yours, get the bank’s approval. It is extremely rare to achieve what you want.
- No one is immune from job loss or other financial difficulties, which could result in the co-borrower losing their home and damaging their credit history.
Permission to sell an apartment if the owner is a wife
When selling a mortgaged apartment, the family will receive a large amount of money, but will lose one piece of real estate. It is wrong from a legal point of view to ignore this fact and not inform the spouse.
Therefore, consent to the sale of a mortgaged apartment is necessary . It doesn't matter who the owner is. The spouses are co-borrowers on the loan, and therefore must repay the debt jointly. Consent will be required in any case.
If the apartment was purchased outside of marriage and the second spouse is not a co-borrower, then only the owner can dispose of the apartment. He doesn't need any consent. Such property is considered personal, therefore the owner can dispose of it at his own discretion.
If there is a marriage contract, consent may not be required . If it stipulates the conditions for the sale of the apartment, then consent is not required. But banks are wary of such transactions. They do not consider them safe, since if controversial issues arise, the terms of the contract may not be taken into account.
