Mortgage Default Rate in Texas

Posted on August 5, 2017 | Back to blog

Dallas Real Estate

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Homeowners can face mortgage defaults for many reasons, and the rates of these mortgage defaults can indicate the health of the overall economy. Mortgage default rates have seen a decrease in recent years as the country continues to recover from the 2008 housing crisis.

But in Texas, homeowners may still face the risk of falling behind on their mortgage payments. Knowing the options that are available to protect you and your family’s financial well-being is essential.

Changes in Mortgage Default Rates

Although mortgage default rates in Texas have gone down in recent years, they remain at a higher level than before the housing crisis. But a recovering economy has resulted in the stabilization of mortgage default rates.

Mortgages that were in serious delinquency (over 90 days past due) amounted to about 8.6 percent in 2010. This was at a time when foreclosure rates were at their highest. But in 2016, foreclosures were at about 2.6 percent of mortgages.

However, issues related to the employment market must also be considered alongside a more stable default rate. In Dallas and in other parts of the country, lack of employment and low wages can lead to an increase in default rates.

Consequences of Mortgage Default

Defaulting on a mortgage can have lasting consequences on your financial well-being. Failing to meet your mortgage obligations negatively impacts your credit, which may prevent you from acquiring a home in the future.

Also, lenders are more wary of approving other types of loans if you have defaulted on your mortgage. This makes it difficult to downsize to a more affordable home, further putting you at risk for other financial issues.

If you default on your home’s mortgage, lenders may take legal actions to recover any losses. This is especially true in cases where homes are valued less than their mortgages.

Overwhelming debt, changes in employment, and other economic factors can push homeowners towards the risk of a default, further increasing mortgage default rates in Texas.

Mortgage Default Protection

Homeowners typically consider refinancing their mortgages as a way to save money and avoid defaulting on their loans. A loan modification may provide you with a lower interest rate or monthly payment, but it may not address all of your financial needs.

If you’re still faced with other forms of debt after refinancing your mortgage, the risk of future default may still be present.

Texas homeowners can sell their homes as a way to avoid default. If you choose to sell your home through a traditional realtor, you need to consider the time and financial costs that it may require. Realtor commissions, closing costs, and other expenses can eat into the returns you ultimately receive on your home’s sale.

Selling your Texas home as-is for cash can be the right choice for protecting you and your family from the financial impact of a mortgage default. HomeVestors buys homes and gives their owners a quick and easy option for getting the most out of their home investment. You avoid the unnecessary costs involved when selling through a realtor. Contact HomeVestors today to learn more about how we can provide the financial relief you need to protect your future.