Mortgage default rate in Texas

Mortgage default rate in Texas

The rates of mortgage defaults in the U.S. and in states like Texas signal the current state of the economy. The mortgage industry took a serious hit with the 2008 crisis that left many without homes and impacted unemployment rates and other economic indicators.

Monitoring mortgage default rates in Texas helps to predict future growth while ensuring that homeowners are keeping up with their monthly payments. In cities like Houston, homeowners must take the steps to protect their financial well-being while getting the most out of their home investment. Economic and personal factors can cause them to face default without warning.

Knowing what options are available helps you avoid the consequences that result from a mortgage default while protecting the financial security of you and your family.

Mortgage defaults today

The number of home foreclosures remains higher than those that existed prior to the housing crisis. Over time, mortgage default rates have stabilized, suggesting a much stronger marketplace.

The number of delinquent mortgages is one of the primary signs of a market that’s in trouble. At the close of 2019, it was estimated that 2.9% of mortgages in Texas were more than 90 days past due, which is classified as “serious delinquency”.

This 2.9 percent of mortgages is much lower than the 8.6 percent seen at the start of 2010, the year at which foreclosure rates peaked.

In mid-2020 an unstable job market overshadows lower mortgage default rates. The average rate for a 30-year fixed-rate mortgage in May 2020 fell to 3.15 percent, according to Freddie Mac.

Limited employment due to COVID likely will cause default rates to increase in Texas and other parts of the country.

How mortgage defaults impact homeowners

Houston homeowners experience serious consequences when defaulting on their home loans. A default negatively affects your credit rating, preventing you from securing a new home or other loans in the future.

Defaulting on your mortgage may result in legal action from lenders seeking to recover losses from a foreclosed home. Although mortgage default rates in Texas and other states may be showing positive signs, the risk of default still remains, and homeowners should explore selling options to obtain the financial relief they need.

Can selling your Houston home protect you from mortgage default?

For many Houston homeowners, selling a home helps them avoid mortgage default and the consequences that result from backing out of your loan agreement. This is especially true for Houston residents who are overwhelmed with other forms of debt. Consumer credit, student loans, and unexpected medical costs place homeowners at a higher risk of mortgage default.

Refinancing your mortgage may reduce your interest rate or monthly payments, but it may not provide long-term default protection if you’re still struggling to eliminate other debt. Selling a home through a real estate agent requires you to invest time and money while reducing your return when having to pay commissions and closing costs.

In Texas, and especially in Houston, selling your home “as is” for cash may be the best option for avoiding a mortgage default. Contact your We Buy Ugly Houses® agent today to learn how we can buy your home quickly and easily, giving you the financial relief you need to overcome debt and avoid a default.

*Updated May 2020