How Many People Can Be on a Mortgage?

Buying a house may feel next to impossible if your income isn’t high enough. Co-buying your home with one or more people may improve your chances of qualifying for a mortgage. The combined income across all borrowers may help you qualify. Co-borrowers with a steady income, solid financial history and decent credit scores can help solidify your application.  

If you are thinking of co-buying a home, you may wonder how many people can be on a mortgage. 

Understanding How Many People Can Be on a Mortgage

Technically, there is no limit to the number of co-borrowers on a mortgage. However, most lenders allow a maximum of four people on a mortgage.  

Co-Borrowers and Co-Signers on a Mortgage

As a co-borrower, you share ownership of the home and responsibility for the mortgage. Co-borrowers have equal rights to the property and are equally responsible for making monthly payments on the mortgage.  

Co-signers have no rights to the property but guarantee mortgage repayment if the primary borrower falls behind. Co-signers only make payments when the primary borrower defaults. You may need a co-signer on a mortgage when you don’t have an established credit history or your score doesn’t meet the lender’s requirements. Co-signers are often family members or friends.  

Why Would Multiple People Want to Buy a House Together?

There are many reasons why multiple people would purchase a house together. The most common situation is when two people are married or living together. However, people looking to make homeownership more affordable may choose to co-buy a home and enter a mortgage with friends or family. Or you may decide to co-buy a house as an investment with multiple people.  

Pros and Cons of Multiple People on a Mortgage

There are benefits and drawbacks to consider when two or more people purchase a home and take out a mortgage together.  

Pros

• Easier to qualify: A mortgage application can be stronger when you include income from two or more people. Your chances for approval may be greater if the parties to the mortgage have good credit and employment history,  
• More affordable: Co-buying with a non-spouse or a group of people can make homeownership more affordable. If you don’t have enough money to come up with the down payment, closing costs or monthly payment on your own, you could spread the financial burden across two or more people.  
• More buying power: The collective financial resources of co-borrowers could allow you to buy a bigger home or live in a better neighborhood.  

Cons

• Damage credit rating: If you split the monthly mortgage payment, you may be in a tough spot if one of the borrowers doesn’t have the money or stops paying altogether. So, even if you came up with your share of the monthly mortgage payment, your credit score could take a hit if you cannot make the full payment on time.  
• Financial strain: If a co-owner loses their job or is stuck with emergency expenses, this could force other co-borrowers to make up the difference. You may have to come out-of-pocket to pay their share of the mortgage, insurance or other household costs too.  
• More paperwork: If you purchase a home with someone other than your spouse, you might need a cohabitation agreement to spell out how much everyone pays and who is responsible for the home’s upkeep.  

How to Apply for a Home Loan With Multiple Co-Borrowers

Before applying for a home loan, you should check with the lender to make sure they will extend a mortgage with multiple co-borrowers.  

Most lenders require every borrower to complete a loan application. When deciding whether to extend a mortgage, lenders consider each borrower’s financial history, income and credit score.  

Tips for Purchasing a Home With Multiple Co-Borrowers

Keep in mind that you will be entering into a financial relationship with other co-borrowers that could last years, even decades. As co-borrowers, you should evaluate the economic implications of entering into a mortgage together. All parties involved need a clear understanding of their expectations once the home is purchased.  

Research and Compare Mortgage Options

Before you buy a home, it’s a good idea to compare the terms and interest rates of multiple banks. In addition, make sure you ask about income and credit score requirements, as well as whether they lend to multiple co-borrowers.  

Get Legal Advice on Co-Ownership Agreements

When you co-buy a home with someone other than your spouse, seeking legal advice may prevent unnecessary stress and financial pressure down the road. A lawyer can draft a co-ownership agreement, which spells out the responsibilities of each borrower.  

Establish LLC

If you plan to buy a house as an investment property with a few friends or family members, consider forming a limited liability company (LLC). As a member of an LLC, you can protect yourself from liability in case of a lawsuit or if another member stops paying the mortgage.  

Before going down this path, you should make sure the lender will extend a mortgage to an LLC.  

How to Hold Title When Buying a Home With Multiple People

A house title identifies the legal owners of a property. The title gives you the legal right to sell the property.  

Sole Ownership

If you are the only owner of the home, you can title the house as sole ownership. You keep full control over the property. So, you can sell the property without consulting anyone and decide who inherits the home if you die. You are also solely responsible for any liabilities associated with the property.  

Joint Tenancy

With joint tenancy, every individual owns an equal share of the property. You can sell or transfer your share of the home without permission, but you cannot sell the entire property unless the other parties agree.  

You cannot designate a beneficiary under joint tenancy. Instead, your share is divided equally with the remaining co-owners upon death.  

Tenants in Common

You don’t hold equal ownership of a property as tenants in common. Instead, equity ownership is allocated based on how much money everyone invests in the property. Like joint tenancy, no permission is necessary to sell their interest. However, your share passes to your beneficiary if you die.  

How to Remove a Name From a Mortgage

Removing a name from a mortgage may be tedious, but it is possible. Even if the lender is willing to remove the other party’s name, you will likely need to re-qualify for the mortgage on your own.  

Compare the Best Mortgage Lenders for Multiple Co-Borrowers

When you decide to buy a house, it’s a good idea to consider your lending options so you know how much you can afford. Take some time to compare mortgage lenders and find the right financing for your budget. Below, we list some of the best mortgage lenders based on approval time, loan options, flexibility and lending requirements.  

Add Multiple People to Your Mortgage to Improve Buying Power

Buying a home with multiple people may improve your chances of qualifying for a mortgage. The collective borrowing power could help you land a better home and defray the costs of homeownership. However, taking out a mortgage with multiple people has drawbacks and you have to be on the same page while prioritizing payment. Before you co-borrow with several people, consider the financial and personal ramifications carefully.  

Frequently Asked Questions