Avoiding mortgages: a third of people who delayed mortgage payments during the pandemic used cash to buy groceries and utilities: Credit Karma study



One lifesaver for homeowners during the COVID-19 pandemic was indulgence, the ability to skip or make smaller monthly mortgage payments in accordance with the CARES law, leaving them more money in case of emergencies.

However, according to a survey conducted for Credit Karma, a financial technology company with over 100 million clients, most people who have shown patience are still worried about not slowing down and withholding mortgage payments.

As of April 25, about 2.2 million homeowners had signed abstinence plans, according to the Mortgage Bankers Association. In May 2020, more than four million U.S. mortgages were on hold.

Of those surveyed who were patient, 59% said they believed their financial stability depended on being able to defer mortgage payments, and 62% said they were stressed about the payments they would eventually need to bill. mortgages in the future.

Shown for leniency, 34% said they spent the money they would have spent on their mortgage on other essentials such as groceries, medical bills, utilities, and additional costs incurred during the pandemic, such as home schooling equipment and care for additional family members.

About 32% said they saved money by sending it to an emergency fund or general savings account, 21% said they used cash to pay off debts such as student loans or credit cards, and 13% said they didn’t have any. … extra money even in indulgence.

“Patience is a double-edged sword,” says Andy Taylor, CEO of Credit Karma Home. “It’s great because it allowed people to stay in their homes. This allowed them to save money for basic necessities, medical care, or even to pay off debts. But you have to pay for this: “Namely, at the end of the period of abstinence, you will have to return this money.”

Results are based on a nationwide online survey of 1,033 adults conducted in April by Qualtrics on behalf of Credit Karma.

About 20% of homeowners who participated in the survey said they had used a home equity-based line of credit – the price of a home minus the amount owed on a mortgage – in the past 12 months. Of these, 41% said they spent money on home renovations.

“Homeowners with mortgages saw an 11% increase in home equity in the past year, mainly because the value of homes has risen significantly in 2020,” says Taylor.


Source link