Co-Signer Rights

Co-Signer Rights

What rights to the property does the co-signer have?

What rights to the property does the co-signer have?

IN THIS ARTICLE:
  • A secured loan is tied to the item purchased with the borrowed money.
  • The title gives the borrower, lender, and co-signer the rights to the security.
  • The real question is, 'Does the co-signer's name appear of the title?'

A Co-signer has Full Financial Responsiblity for the Debt

A lender will require a borrower to find a willing co-signer if it is worried about the borrower's ability to repay a loan. The co-signer takes responsibility for repaying the loan if the primary borrower does not. If the lender cannot collect from the borrower, the co-signer must repay the loan plus late fees, interest, or other charges the lender adds.

Co-signing for Secured and Unsecured Loans

Loans are secured or unsecured. A secured loan is tied to the item purchased with the borrowed money, customarily. In the legal trade, the item in question is referred to as the security. Vehicle loans and property mortgages are common examples of secured loans. A credit card is a common example of an unsecured loan.

A vehicle or house may be purchased with borrowed money, but it is not the loan that gives the borrower or lender the right to possess the security. A title determines who has ownership rights to the vehicle or home.

Co-signing and Financial Health

Don't co-sign without understanding the worst that can happen. Call 800-998-7497 and speak with a Money Coach about your responsibilities and whether you have ownership rights for the property tied to a loan on which you co-sign.

Co-Signing for a Vehicle Loan

For a vehicle purchased with a loan, the title will list the name of the lender. If the borrower defaults on the loan, the title (among other legal documents) will give the lender the right to repossess the vehicle. If a vehicle contains only the name of the primary borrower and the lender, then the co-signer (if any) has no rights to the vehicle. If the co-signer is listed on the vehicle's title, then he or she has the legal right to possess the vehicle.

For real property, the concept is the same as a vehicle loan, but details differ. However, the central point is the same — if the co-signer is listed on a real property's title, then he or she has some interest in that property. Rights to a property can be complex, and take half a semester to teach in law school, so it is beyond the scope of this answer to discuss an owner's possible rights to a property.

Does the Co-Signer Have Rights to the Security?

You asked what rights a co-signer has to a security. The real question is, "Does the co-signer's name appear of the title?" If yes, then the co-signer has a right to the security. If the co-signer's name does not appear on the title, then the co-signer has no right to the security.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

228 Comments

RRichard, Jun, 2021

I co signed on a car with my girlfriend both names on the title we split up and now she said she took my name off the title how do I figure out if that’s true and legal

AAmarillo, Mar, 2021

My cosigner took my car. Who can i turn to for help.

JJoshua Abreu-Rosa, Aug, 2021

Hello Armarillo, 

Thank you for reaching out today. Legally if the cosigner is on the title they have as much right to possess the vehicle. 

What are the results that you would like to see if getting help? 

This would really assist us in determining your available options. Please let us know?  


Regards, Josh 

JJudy, Mar, 2021

I cosigned a car for my son now I want to take his name off from it and the bank is stating I can not if im the primary why cant I take his name off the loan?

JJoshua Abreu-Rosa, Aug, 2021

Hello Judy, 

Thank you for reaching out. Refinancing or consolidating the loan that may help remove your son from the title. For more information please review our website at Bills.com or call Freedom Plus at 800-368-0061.

Regards, Josh 

EEnrique m, Jan, 2021

I co-signed a mortgage with my brother about 4years ago in 2017. We rushed the process so I really didn’t get to look at the cons of co-signing. We rushed because my mom and dad were separating and the house we were staying was up for sale. When we co-signed he gave me a verbal agreement to take me off the loan ASAP at the time I was 19 and didn’t think nothing of it. I lived at the house for 2 years and moved out because I got married and have a kid. Now I’m ready to buy a house but I know I wouldn’t get approved because my name is under my brothers house. I’m stuck renting and I asked him nicely to refinance the house under his name and he just gave me the run around on why he couldn’t do it. On top of him refusing to do anything about it he’s being late on his payments and it’s affecting my credit. I’m thinking about going to a mortgage lawyer and see my options but I honestly don’t know what to do. I feel like I’m at his mercy

JJoshua Abreu-Rosa, Aug, 2021

Hello Enrique.

Thank you for reaching out.

Please, do not take my answer to be legal advice as I am not an attorney. Only attorneys can offer legal advice. 

It does appear you could remove yourself from the mortgage without your bother refinancing. If the mortgage qualifies for an assumption, you may be eligible to remove yourself from the mortgage. Basically, within the loan, your bother could communicate to the lender that he will assume all the rights to the house, including the deed and the mortgage.

If you have maintained a good relationship with your brother, you two may be able to collaborate to show he can afford to pay the loan. Assuming he is all caught up with mortgage payment. 

Lastly, consider the recent increase in housing value. If you successfully sell the home that is another option to get off the mortgage.  

Check out this article I read during my research: https://www.wikihow.com/Remove-a-Name-from-a-Mortgage-Without-Refinancing.

Regards, Josh


FFrancisco, Dec, 2020

On 2015 I wanted a car but my credit wasn’t good enough for the trim I wanted. Dealership said I needed a co-signer but since my sister had better credit than me then I think ended up being the co-signer for my car. It was a lease to buy. All (Dmv paperwork was under my name as well as all the payments were made from my account and my bank) Since my credit improved then my sister wanted to get out so I refinanced the car and left it under my name only. About 2 months ago I finished paying off the vehicle so they finally sent me the pink slip and today I decided to run the carfax and it shows that the vehicle has 2 owners. Which I through out this whole time I thought I was the only owner. Now I’m really upset and would like to know if this is right or wrong and if I can fight this with the dealership ? Thank you.

BBetsalel Cohen, Dec, 2020

I suggest that you review your documentation with the last lender. If you refinanced the loan only in your name, the co-borrower needed to agree to the title change. The documentation on the new loan should reflect the terms of the loan and ownership.

Also, you may want to speak to a certified tax preparer regarding changing title and tax implications.