Welcome back to our blog series on debt! In our first blog, we covered some important ways and strategies that can help you better manage your debt. Debt can feel very singular, but nearly all of us are affected by it. Today, our non-recourse lenders are going to examine some of the current facts and debt trends in the United States. When we have more information on a topic, we’re more equipped to make better financial decisions. Take a look at the current state of debt, and work with our non-recourse lenders today to get set with a home equity loan, a non-recourse loan, or to learn more about refinancing a rental property loan!
What do the above facts about debt in this country show us? Our non-recourse lenders dive in a little deeper:
Fewer Mortgages Are Being Taken Out
Fewer people are taking out mortgages to purchase a house than in previous years. There are many predictions as to why this is. Many millennials (nearly 70 percent, according to CNBC) regret buying their home, usually because they can’t keep up with the demands of the economy. Jobs are not paying at a rate that can keep up with rising prices, which also make it more difficult than ever to take out a mortgage.
Additionally, renting has become a new norm (an added bonus to taking out a non-recourse loan, which we’ll get into later) as part of a lifestyle change. Many people are feeling less content with staying at the same job or same company for years, and are more keen on switching careers, moving to new locations, and not being tied to one place. Plus, these same people could very well be responding to the economic pressures in place.
Student Loan Debt Is Prevalent and Problematic
With 70 percent of people in college taking out student loans, this is another explanation for why fewer mortgages are being taken out — many are trying to tackle one form of debt before they take on another. It might be surprising to know that student loan debt is higher in the United States than credit card debt, though it makes sense when considering the average amount a borrower owes on student loans is nearly $40k.
Nearly Everyone Has Debt
Four out of 5 Americans have some form of debt, making this a significant issue. To add onto this, the average credit score (FICO) of an American is 695, considered to be a rating of “fair.” People are paying off their credit, but not in an especially financially beneficial way — or at least not in a way that will help their future investments.
With each of these debt trends, we can gain some important insight into the current investment market. In a another blog post, we’ll cover some of the ways in which this can help you make decisions regarding a rental property mortgage of your own, and our non-recourse lenders are here to help. Get in touch with First Western Federal Savings Bank today to get started!