Loan Application

• When you apply for a loan, the lender reviews your credit score and documents your income level. A lender can decline a loan application on the basis of your credit score or your lack of income. You don't benefit from adding someone else to a mortgage application if that person has no income and poor credit. Consequently, mortgage applicants often apply by themselves for loans and exclude their nonworking spouses from the mortgage application.
  
  

Mortgage Documents

• During a loan closing, the borrower signs the mortgage document as the borrower and agrees to repay the loan. However, the borrower also signs the mortgage document as the property owner. If you're not a borrower on the loan, you still have to sign the mortgage documents as the property owner because the lender can only secure the lien against a home if all of the owners consent to have a lien placed on the property.
  
  

Default

• If the co-owner of your home defaults on loan payments, you must repay the loan; otherwise, you stand to lose the property. Although you never actually agreed to repay the loan as a borrower, you did allow the lender to secure the lien against your home. Therefore, the lender can foreclose on the home if the borrower proves unwilling or unable to make the loan payments. If you want to avoid foreclosure, you must find funds to pay off the debt or try to refinance the loan into your own name.
  
  

Co-Signers

• Aside from not requiring all homeowners to sign as mortgage borrowers, lenders also often allow people who have no ownership interest in a home to sign as borrowers. You can obtain a loan insured by the Federal Housing Administration with a co-signer who doesn't own the property as long as the co-signer resides in the property. Lenders may also allow for co-signers who neither live in nor own the property being financed.