What Is the Difference Between Primary and Secondary Borrowers on a Mortgage Loan?

Relationships are all about making a commitment. After saying the "I-do's" and committing to each other, couples may want to take the step toward home ownership, requiring another type of commitment: the mortgage. When two people open a mortgage together, one becomes the primary borrower, and the other the secondary borrower.

Determining who will be the primary and secondary borrowers depends on the type of joint mortgage opened and whether the borrowers are co-owners or co-signers. Both have an obligation to pay the mortgage debt, and both get sent to collection if the mortgage goes into default.

In joint mortgages where the two people plan to live together and share ownership of the home, the primary borrower designation reflects credit score and income. Lenders have done away with the antiquated method of automatically assigning the husband as primary borrower, assuming he makes the most money and has a better credit score. Now the primary borrower is the person with the best credit score, because a higher credit score equals a better interest rate. If both borrowers have similar credit scores, lenders will list the person with the higher income as the primary borrower.

A borrower who has bad credit and cannot get a mortgage himself can ask another family member or friend who does have good credit to open the mortgage with him as a co-signer. In these cases, the person opening the mortgage and who will own the home would list himself as the primary borrower, and the co-signer as the secondary borrower. The primary borrower can use the co-signer's credit score to help get a better interest rate and qualify for the loan. Co-signers have no ownership interest in the purchased property in these situations, and they do not appear on the deed to the home.

In both a co-owner and co-signer situation with a primary and secondary borrower, both borrowers have the same obligations to the loan. While the primary borrower becomes the initial contact person, both borrowers share responsibility for making sure mortgage payments arrive at the lender before their due date. If the primary borrower defaults on a mortgage loan, both his and the secondary borrower's credit will suffer.

As with any major commitment, relational or financial, each party must consider the consequences of that commitment ending. With a joint mortgage, even after a divorce or breakup, both the primary and secondary borrower remain fully responsible for the repayment of the loan. A refinance with just one party listed on the application is the only way to get either party out of the loan.