The Fastest Growing Household Debt for Borrowers

first_img Servicers Navigate the Post-Pandemic World 2 days ago Demand Propels Home Prices Upward 2 days ago Subscribe August 12, 2019 1,728 Views Servicers Navigate the Post-Pandemic World 2 days ago About Author: Mike Albanese Housing Market Student Loan Debt 2019-08-12 Mike Albanese Sign up for DS News Daily in Daily Dose, Featured, Loss Mitigation Previous: Citadel Servicing Corporation Announces $3B Servicing Portfolio Next: Are Negative Interest Rates Possible in the U.S.? Data Provider Black Knight to Acquire Top of Mind 2 days ago Mike Albanese is a reporter for DS News and MReport. He is a University of Alabama graduate with a degree in journalism and a minor in communications. He has worked for publications—both print and online—covering numerous beats. A Connecticut native, Albanese currently resides in Lewisville. Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Tagged with: Housing Market Student Loan Debt The Best Markets For Residential Property Investors 2 days ago The Best Markets For Residential Property Investors 2 days ago Demand Propels Home Prices Upward 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Print This Post The Fastest Growing Household Debt for Borrowers J.P. Morgan Chase reports that student debt has doubled in the past 10 years to $1.5 trillion in 2018—second only to mortgage debt—and impacts 45 million borrowers. “Although the financial returns from a higher education degree over a lifetime typically exceed the costs, roughly 22% of student loan borrowers are in default,” the report said. “As a result, some have framed the ‘student loan crisis’ as a crisis of student loan repayment rather than student loan debt.” Among the findings by J.P. Morgan Chase was that the average family pays a median of $179 per month in loans of take-home income in months with positive payments. Nearly a quarter of families spend more than 11% of their income on student loans. While noting younger borrowers, those between 18 and 24-years-old, collectively have the most student debt, it is those within lower-income families that have the most trouble making consistent payments. The study revealed that 44% of homebuyers who earn less than $50,000 annually make positive payments to their loan. That number increases to 52% for those earning between $50,000-$1000, and 63% for borrowers who make more than $100,000.Also, families with multiple loans pay their student loan bill more inconsistently than they do their mortgage or auto loan. The report states that families who pay their loans between 90-100% of the time, make payments on their student loan debt 54% of the time, compared to 64% for their mortgage. Those borrowers also pay their auto loan 62% of the time, and just 56% pay their student loan bill consistently. Reports show that student loan debt has already been impacting the housing market, including a report out of Dallas and WFAA, which delves into how growing debt is making it harder for borrowers to buy a home. “From a practical perspective, somebody coming out of school with heavy student loan debt may simply not qualify for a conventional loan,” said Rick Sharga, founder, President and CEO of CJ Patrick Co., a California-based real estate and financial services consulting firm.Sharga added that millennials came into the market after the Great Recession, many of which had record levels of student-loan debt, and into a market with no jobs.“The notion of them being able to pay back that student loan debt in any reasonable period of time was pretty much a fantasy,” Shagra said. Share Save Related Articles Data Provider Black Knight to Acquire Top of Mind 2 days ago Home / Daily Dose / The Fastest Growing Household Debt for Borrowers Governmental Measures Target Expanded Access to Affordable Housing 2 days agolast_img read more