Co-Borrowing Is Becoming More Common
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.