Who is the Primary Borrower for a Joint Mortgage?

While both applicants share equal obligation of debt on a joint mortgage, the primary borrower is the person whose credit score is used on the application. The applicants do not get to select this part themselves. In most cases, the person with the higher income will become the primary borrower. 

Advantages of a Joint Mortgage

The main reason people seek joint mortgages is to increase the potential limit on their loan. Limits are based primarily on the income of the applicant, while interest rates are based on the credit score of the applicant. So, by combining two incomes, a much larger loan can be sources and a much more expensive home can be purchased. Families and couples choose this route to get into a nicer home earlier. Since both people will be paying for the mortgages in most situations, using both incomes on the application makes sense financially.

What a Joint Mortgage Really Means

A joint mortgage is a legal obligation two people share on a debt. A mortgage has nothing to do with who owns the home in effect. One or both people can have their names on the title of the home, this is a separate issue. Many people confuse having a mortgage paper with having a home deed. While the home is not technically owned by you until the mortgage is paid off, the ownership of your property is recorded with the registrar of your city, not with your mortgage company. The mortgage company then files a lien on the property to show it has been used as collateral on the debt. It is entirely possible you will have one name on the title but two on the mortgage, though this situation is not likely. 

How to Split a Joint Mortgage

Splitting a joint mortgage is not splitting the equity of the home between two people. All that is changing is who the debt for the home is assigned to. If you are separating or divorcing, you will need to restructure ownership of the home as it is filed with the city. You will also need to determine who will bear the burden of the mortgage in the future. If one person is taking over a mortgage that is almost all paid off, then that person may pay the other for the equity he or she is gaining. This issue is complicated and typically requires a legal decision from an outside party to assure it is arranged properly.

When to Use a Joint Mortgage

Using a joint mortgage is only truly a good idea if you have a formal relationship, such as a marriage or civil union, with a partner. Since the process of splitting up a mortgage down the road is extremely challenging, it is best to protect against this need by only going into contract together if you have reason to believe you will not have to exit the contract in the future. A joint mortgage works best for situations where the higher wage earner has the higher credit score and becomes the primary borrower.