One event many people face challenges with is getting approved for a mortgage loan. The approval process lenders use is very complex and grueling, and it can be a hard event to go through. When people have trouble getting approved, they often turn to someone they know for help through the form of a cosigner or co-borrower. If you are not sure what the difference is with these terms, here are some things you should know.

The Definition of a Co-borrower

The first term to understand is co-borrower. A person who applies for a loan is called a borrower. If two people apply for a loan, the first person is called the borrower and the other is called a co-borrower. Both people who are listed as borrowers are responsible for the loan. The lender will check the credit of both people and will view the incomes of both people. Both names will also be on the deed to the house they are buying. In other words, a co-borrower owns the house equally to the borrower. It is extremely common for a married couple to apply for a joint mortgage loan as a borrower and co-borrower. Both are responsible for the home loan and both are equal owners to the house the loan is for.

The Definition of a Cosigner

A cosigner is extremely similar to a co-borrower, yet there are differences. A person who cosigns for a loan will be equally responsible to pay for the loan, but this person does not actually own the house. A cosigner has no rights to the house and is not listed on the deed. A lender will consider this person's income and credit, though, when determining whether or not to approve a loan. It is very common for a person to ask a parent or close friend to cosign when the person applying for the loan does not have good credit.

Which Is Right for You?

As you can see, there are some similarities between these two terms, but there are also some key differences. Now that you understand the differences between these two terms, you might know which is better for you. If you still have questions, though, talk to a mortgage lender to learn more about the process of getting a mortgage loan. This will help you learn more about the differences and will help you choose the right option for you.