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IRVINE, CA—More co-borrowing is a creative way the marketplace is responding to the affordability crunch, and it is helping to sustain the housing boom—but there are drawbacks, ATTOM Data Solutions' SVP Daren Blomquist tells GlobeSt.com. A recent report from the firm reveals that 22.8% of all purchase-loan originations on single-family homes in Q2 involved co-borrowers—multiple, non-married borrowers listed on the mortgage or deed of trust—up from 21.3% in the previous quarter and up from 20.5% in Q2 2016. We spoke with Blomquist about the positives and negatives of this trend and its future implications for the housing market.
GlobeSt.com: What are the positives of having a co-borrower in a loan situation?
Blomquist: You may be able to qualify for a loan to buy a home that you might otherwise not qualify for on your own. Our data shows the presence of a co-borrower also helps to reduce the interest rate—the average interest rate on Q2 2017 loans with co-borrowers was 4.11% compared to 4.28% for loans without co-borrowers—which can lower the monthly mortgage payments, making the home purchase more affordable. A co-borrower situation can also involve the co-borrower contributing to the down payment, which also lowers the monthly mortgage payment.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
