Home ownership is a goal for many Florida residents and others throughout the nation. Financial advisers often tout the tax benefits of owning a home as a reason to purchase a residence rather than continuing to rent. However, recent statistics from a financial services website show that homeowners tend to accumulate more credit card debt than those who rent.
For years, experts have cited the benefits of buying a home. Some of these include the ability to write off mortgage interest and the opportunity to build equity. Yet, there are other costs associated with home ownership that may create financial difficulties. Property taxes and insurance must be paid routinely, in addition to costs for repairs and maintenance.
Estimates reveal that routine repairs and maintenance run between 1% and 4% of a home’s value. For even moderately priced properties, this can result in expenses of several hundred dollars a month. If a major repair is needed, such as replacing a roof or HVAC system, a homeowner may be looking at paying thousands of dollars. When the unexpected expenses occur, many consumers reach for their credit cards.
Another contributing factor to the increased credit card debt is that many people have purchased homes outside their budgets. The general guideline is that payments for housing should not exceed 30% of take-home pay. However, a report from Harvard’s Joint Center for Housing Studies shows that almost 19 million households spend over 50% of their income on their homes.
Regardless of how the credit card was accumulated, it can feel overwhelming. Those hoping to reduce or eliminate their credit card debt should contact a Florida bankruptcy attorney for assistance. An experienced lawyer can help clients develop a plan to get their financial situation under control.
Source: fool.com, “Will Owning a Home Drive You Into Credit Card Debt?“, Maurie Backman, Dec. 15, 2017