Co-Borrowing Is Becoming More Common

For lower mortgage rates, buyers are seeking assistance from family members and private companies

September 7, 2017
house sale

Buyers have found a way to obtain more expensive properties without having to take on mortgage insurance: co-borrowing.

MarketWatch reports that the strategy is becoming popular, as 22.8 percent of mortgage purchase applications in the second quarter involved a co-borrower, up from 20.5 percent the year before. The results come from an Attom Data study.

In this case, co-borrower is a broad term, counting everyone from helpful family members to companies who offer down payment assistance in return for a share of equity in the home.

Attom did a deeper dive through their records for MarketWatch and determined that home buyers with a co-borrower are buying smaller but more expensive properties – and doing it with lower interest rates and more money down, which allows them to avoid paying mortgage insurance.

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