Borrowers are going the exotic loan route to qualify for more house, according to a report which indicated one particular age group favors mortgage brokers more than others.
Such is a conclusion of the annual online personal-finance poll by the Wall Street Journal and Harris Interactive, which surveyed 2,790 people between Aug. 29 to 31 who purchased a home in the past three years.
Out of four nontraditional products, the popularity of payment option mortgages grew the most -- to 9 percent from 4 percent in last year's survey, according to WSJ.
The share of borrowers using piggyback mortgages, which consist of a first mortgage combined with a home-equity loan or line of credit, reportedly edged up to 12 percent from 10 percent over the year.
Although miss-a-payment mortgages still were the least popular of the nontraditional mortgages, their overall use nudged up to 3 percent this year from 2 percent.
Meanwhile, interest-only mortgages continued to be the most popular of the nontraditional products, but their share fell to 14 percent from 17 percent last year. For borrowers ages 18 to 34, however, the percentage rose to 23 percent from 16 percent.
The use of nontraditional mortgages seems to be higher amongst borrowers in the Midwest, as this region had the largest share of borrowers in each of the loan categories, except piggyback loans, which were most popular amongst borrowers who lived in the Northeast, the survey results indicate.
Over two-fifths of respondents answered that they did not know which nontraditional mortgage, if any, they had.
The poll also showed that 42 percent of those who purchased a primary residence over the last three years did so through a mortgage broker, 28 percent went to a direct lender, 9 percent went to someone else, and 14 percent said they did not need a mortgage to buy their home.
This year, borrowers ages 35 to 44 were the age group who used mortgage brokers most, followed by borrowers ages 18 to 34, who were most likely to use brokers last year.
The survey also found that 15 percent of those who said they owned a home said they recently obtained a home-equity loan and the main use of these proceeds was for home improvements.