“Co-borrowing” gains traction in the housing market

Larger down payments help buyers avoid paying mortgage insurance

Sep.September 13, 2017 11:00 AM
Home with sold sign (Getty)

Apparently the old adage “sharing is caring” applies to homes too.

Home buyers are increasingly enlisting co-borrowers when purchasing a home — to help them land a more expensive property, Realtor.com reported.

In the second quarter, 22.8 percent of mortgage purchase applications involved a co-borrower, according to a new report from real estate information provider Attom Data. That’s up from 21.3 percent in the prior quarter and 20.5 percent a year ago.

A closer look also shows home buyers are buying smaller but more expensive properties and doing it with lower rates and more money down.

Co-borrowing has become easier recently with the onset of home-equity sharing programs, such as San Francisco’s Downpayment Assistance Loan Program. Private companies assist buyers with their down payment in exchange for a share of equity.

Demographic characteristics are nowhere to be found on Attom’s report, but data suggests most co-signers are skewed towards first-time homebuyers. [Realtor] – Natalie Hoberman

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