What is the difference between a co-borrower and guarantor?
Joel Olson • February 13, 2017
A co-borrower is on the Title with the main borrower. A guarantor is not on the Title, but is responsible for the
loan. It is rare for a lender to allow a guarantor, so most require individuals to be co-borrowers. There are some
considerations on tax and estate in each situation.
When a borrower is not on title, but on the loan:
Pros:
- You can qualify for exemption from Property Transfer Tax on another purchase if you ever buy again.
- The main borrower may qualify for an exemption with only them on title.
Cons:
- In the case of a Separation, there can be some more involved legal work to split the matrimonial home.
- In the case of a death, the property does not automatically go to the other borrower, so this can create additional estate problems.
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