Co-borrowing for a house purchase
Last updated: 3 Aug 2025
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Co-borrowing for a home purchase is one way to help those wanting to own their dream home more easily. This is because, if only one borrows, their income may not be sufficient for the bank's loan approval process. However, this does not mean that a co-borrower will be approved 100% of the time. There is also a chance that the loan may not be approved for the following reasons:
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1. Co-borrower has debt.
When the primary borrower does not have sufficient income to qualify for a home loan, recruiting a co-borrower is a simple method to increase the borrower's income until the bank deems it feasible to grant the loan. However, the co-borrower's income is not the only key factor. The bank will also consider the co-borrower's debt level. Even if the co-borrower's income is high, but they have significant debt to repay, it is possible that the co-borrower is at risk of not being able to repay the loan. This ultimately leads to the bank's right to reject the co-borrower's application.
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2. Co-borrowing but still not having sufficient income.
When applying for a home loan, the price of the home is a key factor in determining whether the bank will approve the loan. This depends on whether the borrower's income is appropriate for the home price or loan amount to be approved. Even if a joint loan is applied for, there's a chance that both co-borrowers' incomes will fall below the bank's threshold for high-priced homes. Furthermore, if the combined debts of both co-borrowers are also considered, if their combined incomes do not meet the threshold, and each has existing debts, there's a high chance that even with a joint loan, the loan application will still be rejected.
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3. Co-borrowers with a history of defaults or credit bureau issues
The key to a home loan, whether applied for individually or jointly, is that the bank will only approve the loan if it determines that the borrower or co-borrower has the ability to repay the loan. Therefore, even if the co-borrower has a high income, if they have a history of defaults or credit bureau issues, the bank may consider the co-borrower incapable of repaying the loan and instead focus solely on the primary borrower. If the primary borrower's income is insufficient, they have significant debts, or a history of defaults, there's a high chance that even a joint loan application will not be approved.
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4. Co-borrower's age does not meet the criteria.
A typical home loan or condo loan takes approximately 30 years to repay. Bank loan approval criteria also factor in age. The borrower's age, combined with the 30-year repayment period, should not exceed 60 years. Simply put, if the age is too high, the chances of loan approval are lower. Banks believe that the older you are, the lower your repayment ability will be due to potential job loss and income loss. Therefore, if the co-borrower is too old, exceeding the bank's criteria, or if the bank perceives that age as a risk to repayment, the co-borrower's application may ultimately be rejected.
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Not every co-borrower will be approved by the bank. However, every loan application requires careful consideration of the financial capabilities of both the primary borrower and the co-borrower. This includes sufficient income, age within the criteria, a clean repayment history, and no credit bureau issues. Furthermore, the co-borrower must be free of excessive debt. Understanding these criteria and carefully considering them, selecting a co-borrower who meets the bank's criteria will ensure that they meet the criteria. The chances of getting a joint home loan approval are 100% certain.
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Thank you for the great information from REIC.
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1. Co-borrower has debt.
When the primary borrower does not have sufficient income to qualify for a home loan, recruiting a co-borrower is a simple method to increase the borrower's income until the bank deems it feasible to grant the loan. However, the co-borrower's income is not the only key factor. The bank will also consider the co-borrower's debt level. Even if the co-borrower's income is high, but they have significant debt to repay, it is possible that the co-borrower is at risk of not being able to repay the loan. This ultimately leads to the bank's right to reject the co-borrower's application.
___________________________________________
2. Co-borrowing but still not having sufficient income.
When applying for a home loan, the price of the home is a key factor in determining whether the bank will approve the loan. This depends on whether the borrower's income is appropriate for the home price or loan amount to be approved. Even if a joint loan is applied for, there's a chance that both co-borrowers' incomes will fall below the bank's threshold for high-priced homes. Furthermore, if the combined debts of both co-borrowers are also considered, if their combined incomes do not meet the threshold, and each has existing debts, there's a high chance that even with a joint loan, the loan application will still be rejected.
___________________________________________
3. Co-borrowers with a history of defaults or credit bureau issues
The key to a home loan, whether applied for individually or jointly, is that the bank will only approve the loan if it determines that the borrower or co-borrower has the ability to repay the loan. Therefore, even if the co-borrower has a high income, if they have a history of defaults or credit bureau issues, the bank may consider the co-borrower incapable of repaying the loan and instead focus solely on the primary borrower. If the primary borrower's income is insufficient, they have significant debts, or a history of defaults, there's a high chance that even a joint loan application will not be approved.
___________________________________________
4. Co-borrower's age does not meet the criteria.
A typical home loan or condo loan takes approximately 30 years to repay. Bank loan approval criteria also factor in age. The borrower's age, combined with the 30-year repayment period, should not exceed 60 years. Simply put, if the age is too high, the chances of loan approval are lower. Banks believe that the older you are, the lower your repayment ability will be due to potential job loss and income loss. Therefore, if the co-borrower is too old, exceeding the bank's criteria, or if the bank perceives that age as a risk to repayment, the co-borrower's application may ultimately be rejected.
___________________________________________
Not every co-borrower will be approved by the bank. However, every loan application requires careful consideration of the financial capabilities of both the primary borrower and the co-borrower. This includes sufficient income, age within the criteria, a clean repayment history, and no credit bureau issues. Furthermore, the co-borrower must be free of excessive debt. Understanding these criteria and carefully considering them, selecting a co-borrower who meets the bank's criteria will ensure that they meet the criteria. The chances of getting a joint home loan approval are 100% certain.
___________________________________________
Thank you for the great information from REIC.
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