Seek counseling before falling behind on mortgage payments
The state of the economy has presented financial issues to households in several areas, ranging from credit card debt and student loans to underwater mortgages and foreclosure. As a result, many adults who lack the income to meet all of their financial obligations may be forced to prioritize some bills over others.
Recent reports show that more borrowers are taking on credit card debt in higher amounts, primarily as more lenders market to individuals of all credit score levels. New data from TransUnion shows that while more consumers are applying for more credit accounts or focusing on paying down their existing balances, they may be neglecting their mortgage payments, Fox Business reports. Overall, the results reveal that as mortgage delinquencies increased, credit card delinquencies actually declined, suggesting the homeowners were more focused on their credit card balances than their mortgage payments, which may be higher and more burdensome, TransUnion research director Charlie Wise said.
"Consumers are protecting their credit cards," Wise said. "It gives them financial flexibility."
Because many homeowners may see their home as a burden, especially those who are underwater on their mortgage, some adults are instead trying to maintain a healthy credit card account as a means of funding their day-to-day needs. Others also view credit cards as an emergency resource in the event of unexpected costs.
However, adults who are being forced to choose between making credit card payments and meeting their mortgage obligations should consider housing counseling and working with a financial professional to find out their options. Working with a professional can help adults avoid damaging their credit standing and losing their home. Homeowners may find that they are eligible to refinance their homes. In other instances, borrowers may benefit from consolidating their credit card accounts, which may give them more financial flexibility to pay their mortgage.
There are several options and scenarios that may help adults get back on track and start repairing their finances and credit counseling can provide the tools, resources and expertise to get the ball rolling. For this reason, it's crucial for adults to closely examine their finances, the areas that are causing them hardship and address these issues with a professional immediately to develop a debt management plan.