Is The Housing Market Becoming A Co-Borrower’s World?

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Poll just about anyone who wants to buy a house these days and the answer you’re likely to hear about why they’re still renting will have to do with two things:

Down and Payment.

Yes, the first pile of cash is always the hardest to come up with for new homeowners.

CENTURY 21 Gavish Real Estate has held for years a number of programs designed to help people find ways to get money for their payment. However, most of the programs we discuss in our seminars revolve around federal grants and low-down payment loans.

A new form of home buying has emerged in the last couple of years that could very well change how the landscape of home affordability because it’s allowing for more and more people to buy a home.

It’s called co-borrowing, and the mortgage industry has taken notice.

A co-borrower is different from a co-signer in that the co-signer is not taking a legal ownership interest in the home.

Co-borrowers’ credit worthiness and assets are considered subject to the mortgage, and they are also responsible for ensuring monthly payments arrive at the bank, and they have an ownership stake in the property.

There’s another form of down payment assistance growing in the market, too, especially in places where the median home price is well into the six figures.

Cash for equity lenders are private organizations that provide up to 50% of a home buyer’s down payment in exchange for equity and repayment of the initial loan.

For example, if a down payment was $100,000. The down payment lender would provide $50,000. When the owner eventually sells or refinances the home, they will return the $50,000 in addition to a 25% of the equity earned over the period of ownership.

So yes, that could mean a hefty payout after closing, but these types of arrangements work out well for the home buyer because the down payment lender has no legal ownership or rights to the home. They can’t tell you what color to paint it or how to add to its value in any way.

If home ownership is a dream of yours and you’re looking for the right agent to help you reach it, contact CENTURY 21 Gavish Real Estate today!