Archive for the ‘Student Loans’ Category

Consumer Borrowing Slows in June

Posted on August 10, 2017 by Laura Lam

Consumer borrowing slowed a bit in June from the torrid growth in the prior month, but continued at a solid pace, according to government data released Monday.  Total consumer credit increased $12.4 billion in June to a record seasonally adjusted $3.86 trillion, posting an annual growth rate of 3.9%, according to the Federal Reserve.  This is down from a revised $18.3 billion gain in May, which was the strongest rate in six months. Consumer borrowing slowed a bit in the second quarter as a whole, continuing a trend in place since last fall. Credit rose at a 4.5% annual rate…

Most Americans Die With Debt

Posted on August 04, 2017 by Laura Lam

You’re probably going to die with some debt to your name. In fact, 73% of consumers had outstanding debt when they were reported as dead, according to December 2016 data provided to Credit.com by credit bureau Experian. Those consumers carried an average total balance of $61,554, including mortgage debt. Without home loans, the average balance was $12,875. The data is based on Experian’s FileOne database, which includes 220 million consumers. Among the 73% of consumers who had debt when they died, about 68% had credit card balances. The next most common kind of debt was mortgage debt (37%), followed by…

Average Credit Score Hits All-Time High

Posted on July 13, 2017 by Laura Lam

Americans are seeing higher credit scores than ever as the average national FICO score reached an all-time high, hitting 700 for the first time ever.  FICO scores range from 300 to 850.  Average credit scores bottomed out at 686 during the housing crisis after a sharp increase in foreclosures. They have steadily ticked higher since then, according to FICO vice president for scores and analytics Ethan Dornhelm. “A score of 700 is considered “very good credit.” Consumers will likely qualify for the credit they want at favorable terms,” Dornhelm said.  “On the other hand, credit card balances and delinquencies are…

Is the New Household Debt Record Cause for Concern?

Posted on June 14, 2017 by Laura Lam

Last month, the New York Federal Reserve reported that household debt across the nation has hit a dubious milestone in the first quarter: It surpassed the peak debt level of 2008 at $12.7 trillion. Household debt — including mortgages, auto and student loans, and credit cards — rose $149 billion compared with the last quarter of 2016, with nearly all the gain coming from mortgages. Reaching the peak raises questions about whether the backdrop exists again for another financial meltdown.  But the data show the current structure of debt is substantially different from 2008. According to a research officer at…

73% of Americans Have Financial Regrets

Posted on June 06, 2017 by Laura Lam

Nearly 3-in-4 U.S. adults have financial regrets, according to a new Bankrate.com report. The most common is not saving for retirement early enough, followed by not saving enough for emergency expenses and taking on too much credit card debt. Taking on too much student loan debt is fourth, however, it tops the list among older millennials (27-36 year-olds). Fifth overall is not saving enough for your children’s education and sixth is buying more house than you could afford. Baby Boomers are the most likely to regret not saving for retirement earlier; remorse over this issue grows steadily from age 18-62. It’s…

The Top 10 Careers for First-Time Home Buyers

Posted on May 26, 2017 by Laura Lam

Although home prices continue to rise, one degree stands above the rest as being the best for those who wish to buy at home closer to the start of their career.  Of the top 26 degrees that would allow graduates to purchase a home in four years, 22 of them involve engineering, according to a recent study from Realtor.com.  The top degree enables buyers to purchase a home within 2.5 years of graduation. “When it comes to homeownership, degrees in engineering really pay off,” realtor.com Senior Economist Joe Kirchner said. “It shows just how powerful a high starting salary can…

Household Debt Hits New Record

Posted on May 23, 2017 by Laura Lam

Household debt is topping its 2008 peak prior to the housing crash. Total household debt has risen to $12.73 trillion in the first quarter, the Federal Reserve Bank of New York reported last week. However, Americans are handling their debt—mortgages, credit cards, auto loans, and other forms of borrowing – much better, the report shows.  Americans were delinquent on 4.8% of total debt in the first quarter. For comparison, at the end of 2009, 11.9% of consumers were delinquent on their debt by at least 30 days. The increase in household debt may indicate that more Americans are confident about…

Switching Gears: Builders Turn to Starter Homes to Lure Millennials

Posted on May 22, 2017 by Laura Lam

First-time buyers are rushing to buy homes after a decade on the sidelines, promising to kick a housing market already flush with luxury sales into higher gear.  Tracking home sales to a particular age group is hard, but a series of data points form a mosaic of a generation of young people ready to buy: The number of new-owner households was double the number of new-renter households in the first quarter of this year, the share of first-time buyers is creeping back toward the historical average, and mortgages for first-timers are on the rise. “They’re crawling out of their parents’…

Fannie Mae Changes Affect Borrowers With Student Loans

Posted on May 11, 2017 by Laura Lam

Fannie Mae has recently outlined changes in the way lenders can qualify potential borrowers who have student loan debt.  The policy change is designed to make it easier for more consumers to qualify for mortgages, in part by excluding some non-mortgage debt for income-to-debt calculations.  These debts can be things like installment loans, student loans, and other monthly debts as defined in the company’s mortgage lending guide. According to the Fannie Mae web site, “If the lender obtains documentation that a non-mortgage debt has been satisfactorily paid by another party for the past 12 months, then the debt can be excluded from…

Millennials’ Debt Load Could Weigh Down Economy

Posted on May 09, 2017 by Laura Lam

Millennials — 21 to 34-year-olds — hold an estimated $1.1 trillion of the country’s $3.6 trillion in consumer debt, according to UBS, as rising student and auto loans outweigh a drop in mortgages.  All that rising debt is coming with rising default risks. A UBS evidence lab survey found that 52% of people worried about defaulting on any loan over the next 12 months were in the 21 to 34 age group. That’s not good news considering those same individuals are meant to be the largest source of spending on big-ticket purchase items like houses and cars over the next year.  There is already…