According to a recent report by a consumer credit website, the average balance for a mortgage in the state of Florida has decreased by about $3,000 over the past year. This is good news for borrowers in Florida, who, like homeowners across the country, have been struggling with adjustable rate mortgages and balloon payments.
Homeowners have been working hard to pay off their debt and many have been pursuing loan modifications to make payments easier to afford. In some parts of the state, credit card debt also went down over the past year, reducing on an average of about $1,000 in two counties.
Experts say that a big factor in the reduction in mortgage debt in the state is that consumers are taking their debt more seriously in recent years, working to pay down or refinance loans that they cannot afford. A mortgage banker working in South Florida told reporters that he has many middle aged clients who are choosing to take from their retirement accounts to help pay down their debt and get in a better position to refinance. While this might not be a viable solution for all Florida borrowers, it may signal a shift in priorities for people who were previously comfortable maintaining long term, high principal loans.
Other Floridians have reduced their debt through a short sale or a bankruptcy. While these might not be the first choice for distressed homeowners, bankruptcy is a good option for people who truly cannot afford all of their debt with their current income.
More information on foreclosure, short sales, and other mortgage-related debt issues can be found on our website.
Source: Orlando Sentinel, “Average S. Fla. Mortgage balance drops by almost $3k in a year,” Donna Gehrke, Dec. 13, 2012.