GITNUX MARKETDATA REPORT 2024

Mortgage Co-Signers Statistics

Mortgage co-signers are typically more prevalent among younger age groups and individuals with lower credit scores, as they are often used to help secure loans for first-time homebuyers or those with limited credit history.

Last Updated: June 17, 2024

Written & Summarized by: Jannik Lindner

How we write

In this post, we explore the trend of co-signers on mortgage loans, uncovering key statistics and insights from the real estate market. From the prevalence of co-signers among homebuyers to the impact on credit scores and financial implications, we delve into the role and significance of co-signers in the homebuying process.

Statistic 1

"Roughly 14 percent of homebuyers in 2020 had a co-signer on their mortgage loan."

Statistic 2

"Parents made up 51 percent of mortgage co-signers."

Statistic 3

"The average credit score of co-signers for mortgage loans is 740."

Statistic 4

"38% of co-signers end up paying some or all of the loan because the main borrower fails."

Statistic 5

"28% of co-signers suffered a drop in their credit score because the person they co-signed for paid late or not at all."

Statistic 6

"25% percent of co-signers of student loans were required to make payments on at least some of the student loan debt."

Statistic 7

"In cases where a co-signer is needed, 58% of people turned to their family for help."

Statistic 8

"Co-signers commonly have more than 15 years of credit history, compared to around 7.5 years for the average American."

Statistic 9

"Co-signers can help borrowers reduce their interest rate by up to 50 basis points."

Statistic 10

"Roughly one-third of co-signers found themselves in a worse financial situation after co-signing a loan."

Statistic 11

"61% of mortgages with a co-signer are to first-time buyers."

Statistic 12

"Homebuyers with co-signers were more likely to have been rejected (17%) from a loan in the past 12 months than those without co-signers (15%)."

Statistic 13

"Over 65% of Gen Z and 43% of Millennial respondents suggest they're likely to have a co-signer on their first home loan."

Statistic 14

"In 2021, on average, mortgage interest rates for borrowers with co-signers are lower by 0.25 percent than those without co-signers."

Statistic 15

"An estimated 25% of millennials may need a co-signer to get approved for their first-time mortgages."

Statistic 16

"The top three states with the highest percentage of co-signed mortgage loans are Florida (14.9%), California (14.6%), and Texas (14.4%)."

In summary, co-signers play a significant role in the mortgage market, with roughly 14% of homebuyers using them in 2020. Parents are the most common co-signers, typically with a high average credit score of 740. However, co-signing comes with risks, as shown by the 38% who end up making payments due to the main borrower’s failure and the 28% who experience credit score drops. While co-signers can help borrowers secure loans and lower interest rates, around one-third find themselves in a worse financial situation afterward. The data also indicate a generational trend, with a high percentage of Gen Z and Millennials considering co-signers for their first home loans.

Jannik Lindner

Jannik is the Co-Founder of Gitnux and has been working in the digital space since 2016. He is specialized in content and tech.

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