Mortgages typically comprise the largest chunk of the average Florida household’s debt. However, they are not necessarily the largest financial obstacle when it comes to repaying debt. Still, as other forms of debt mount, the possibility of falling behind on house payments may be a reality.
During the 2008 recession, peak household debt hit $14.7 trillion. Household debt has already surpassed this amount and is set to soon hit $15.7 trillion. Unlike in the past, mortgages represent a relatively small portion of that debt and may be less worrisome than in years past.
The average mortgage currently takes up approximately 68 percent of household’s disposable income. In 2008 the mortgage balance was a whopping 98 percent. Comparatively, credit card balances as a percentage of disposable income have not reduced much over the years, with current balances at about 7 percent compared to 10 percent in 2008.
Even though most people are better equipped to handle their current mortgages, that does not mean they are immune to financial problems. Student and auto loans now weigh more heavily on the average consumer, as do credit cards. One expert predicted that consumers will soon add $1 trillion to household debt from these types of expenses.
Debt can add up quickly for any consumer, and amid growing household debt it can be difficult to keep up with payments. Falling behind on house payments can be particularly troublesome and may put Florida individuals at risk for foreclosure. Ultimately, quick action in the face of insurmountable debt may help debtors achieve the best financial future possible. For some, seeking mortgage modification might be best, while others may find that filing for bankruptcy is more appropriate.