Getting a mortgage in Kazakhstan is a serious financial commitment, and banks thoroughly check a client's solvency, official employment, and other loans before approving one. Borrowers are often rejected, but that does not mean a mortgage becomes impossible: as the portal Krisha noted, Kazakhstanis can bring in a co-borrower or a guarantor, reports infohub.kz.
A co-borrower is needed to increase the chances of mortgage approval or to obtain a larger loan amount. The bank takes their income into account when issuing the mortgage. If a person becomes a co-borrower, they assume obligations to the bank: if the borrower stops paying, the bank may demand repayment from them as well.
However, a co-borrower gains not only obligations but also a share in the mortgaged property. It is distributed by agreement of the parties, regardless of who contributed how much money, and not necessarily in half. This also means that the co-borrower has ownership rights to their share, can live in the apartment, or dispose of it at their discretion, for example, by renting out their part.
A co-borrower can be a relative, a friend, or another person who meets the bank's requirements and has sufficient official income. By the way, spouses automatically become co-borrowers unless a prenuptial agreement states otherwise. One can give up co-borrower status, for example, if the main borrower's income has increased and they can repay the loan on their own. Otherwise, a new co-borrower will need to be found.
Unlike a co-borrower, a guarantor does not become an owner of the apartment and does not participate in its purchase. However, their income is also taken into account when applying for a mortgage. The point is that their task is to guarantee the bank that the debt will be repaid. This means that if the borrower cannot pay, the guarantor will have to assume their obligations. At the same time, they still will not participate in the purchase and will not have rights to the mortgaged property.
The differences between a co-borrower and a guarantor in Kazakhstan are as follows: both sign the loan agreement; the co-borrower participates in loan payments, while the guarantor does not (only if necessary); the co-borrower receives a share in the real estate (unless otherwise stated in the agreement), the guarantor does not; the co-borrower can live in the apartment, the guarantor cannot. Source: krisha.kz.
Thus, Kazakhstanis can solve their mortgage problem and secure bank approval. At the same time, citizens who are offered the role of co-borrower or guarantor should be prepared for the fact that this is not a mere formality. By agreeing to help someone with a mortgage, they take on serious obligations.