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Is co-signing and co-owning the same thing?

It is common for people to get a co-signer on a loan when making a large purchase. Whether you are buying a home in California or getting something less expensive, such as a car, if your credit is not where the lender wants it to be, you will probably need a co-signer. On the other hand, sometimes, especially with property, you may choose to have a co-owner. There are some differences between a co-signer and a co-owner that are important to understand.

A co-signer, according to Zacks, is someone who signs on your loan to take some of the burden. If you fail to pay your payments, this person says that he or she will pay the payments and ensure the loan is paid back to the lender. This person does not own the property that is securing the loan and has no interest in it. He or she is simply signing on the loan. This is done often when you do not have good enough credit or you have some credit issue that would not allow you to qualify for the loan by yourself.

A co-owner also will sign the loan, but this is done with the intent to share ownership. You both benefit from the property and have an interest in it. The co-owner is also responsible for loan payments just like you, but in this situation, you both own the property together. So, it is likely, for example, if you own a home together, that you would share in the loan payment. This information is for education and is not legal advice.

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