To add a co-borrower to a mortgage in California, the existing mortgage must typically be refinanced under the co-borrower’s creditworthiness. The original borrower and co-borrower apply jointly for a new loan, which replaces the original mortgage. Lenders evaluate both parties’ credit scores, income, debt-to-income ratios, and assets. If approved, the new loan terms may adjust interest rates or loan amounts. The lender then legalizes the co-borrower’s role through updated documents, such as a revised promissory note or deed of trust.

This process is necessary because California law requires all mortgage borrowers to be explicitly listed on the loan agreement. Adding a co-borrower often improves loan approval chances by combining credit profiles, as co-borrowers share responsibility for repayment. According to the California Association of Realtors (2022), mortgages with co-borrowers had a 78% approval rate compared to 62% for single-borrower loans. Additionally, the Federal Housing Finance Agency (2023) notes that co-borrowers can reduce interest rates by 0.5–1.5% through improved debt-to-income ratios. Refinancing ensures compliance with lender standards and legal requirements, while data underscores the financial benefits of co-borrower inclusion. The process balances legal adherence with financial strategy, making it a common solution for California homeowners seeking to optimize mortgage terms.