According to a June 2015 report by Black Knight Financial Services (BKFS), U.S. mortgage holders possess the highest levels of non-mortgage related debt in ten years. These debts include credit card debt, auto loan debt, and student loan debt.
Four main loan groups were evaluated in the report. These include:
- Federal Housing Administration (FHA) and VA loans;
- Portfolio loans;
- Private loans;
- Government-Sponsored Enterprise (GSE) loans.
Utilizing data from Equifax Servicing data and McDash Credit’s database, BKFS was able to examine U.S. mortgage holders’ levels of non-mortgage related debt. The report revealed that Americans with mortgages have an average of $1,400 more non-mortgage related debt this year than in years past. So far for 2015, the total amount of non-mortgage debt reached $24,825. For 2014, it was $23,412. In 2006, it was $22, 817.
The report explains, “Non-mortgage debt is a key component of home affordability–the more total debt and the higher monthly non-mortgage payments borrowers have, the less money is available to put toward a new home purchase, to qualify for refinancing or, potentially, to meet current mortgage obligations.”
The largest category for non-mortgage debt was automobile debt, which accounted for 81% of overall non-mortgage debt. Since 2011, auto debt has been responsible for $2,094 of the nearly $2,600 increase in overall non-mortgage related debt. BKFS also found that student loan debt has skyrocketed to a 15% all-time high, among mortgage holders, with an average loan amount of $35,000. On the other hand, credit card balances for mortgage holders have decreased to below 83%.
Borrowers holding FHA/VA loans were shown to have the highest levels of non-mortgage related debt. FHA borrowers carry the highest student loan and auto debt amounts, as well as highest total non-mortgage related debt. However, GSE borrowers have 24% lower overall non-mortgage debt than FHA loans.
BKFS has discovered a direct correlation between non-mortgage debt, mortgage inquires, and prepayments. Borrowers with a recent mortgage inquiry on their credit report carry nearly 40 percent or $10,000 more debt on average than those who do not. Meanwhile those with a recent inquiry who have paid their mortgages on time have approximately $4,000 less non-mortgage related debt than those without the inquiry.
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
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