A mortgage borrower is the person who applies for that mortgage and who undertakes to repay the loan in monthly instalments, within the established term and paying a specific and different interest rate depending on the interest rate of the specific mortgage arranged: be it fixed-rate, variable-rate or mixed.
The borrower enters into an undertaking with whoever lends the money. This undertaking takes the form of an agreement which sets out the terms of the agreement that the two parties sign. The agreement is the written version of this undertaking, and also proof of it if any problems arise.
Can there be more than one borrower in a mortgage?
Yes, there may be more than one borrower in a mortgage. If the financial institution deems that a single holder does not have the right profile to take on the mortgage, it may propose that there also be a co-holder. There can also be co-holders if there are several borrowers, for example, a couple buying a house, or several partners setting up a business project.
Remember, the co-holder is not a guarantor. The guarantor guarantees the loan and will stand behind the borrower if it falls behind in its repayments. However, the co-holder has the same direct undertaking towards the agreement as the other borrower.
Are lender and borrower the same thing?
No, lenders and borrowers are quite different. In fact, a lender is the opposite of a borrower: the lender is the physical or legal economic agent who lends us their money, having assessed our creditworthiness, and who will also ask us to fulfil certain conditions in return.
Can a borrower not be the owner?
Yes, the borrower does not necessarily have to be the owner. In that case we will sign as holders of the mortgage deed, but we will not appear on the deed of sale. In other words, we agree to cover the debt without receiving any part of the property, as a guarantor.
This procedure is used to improve the household income, to pass the bank's scoring process and secure the transaction. But we do not recommend it, as it could be deemed to be a hidden donation, and also, if we fall behind on the repayments, we may be reported to the Bank of Spain credit reporting agency (CIRBE).