Real estate market and credit trends are associated deeply with each other. Recession, real estate boom, credit crunch and many such deeply altering changes occurred in the past decade making the scenario completely different today than it was even a couple of years ago. However, it is important to track these changes to understand the current scenario as well as predict the future trends when you are deciding to invest in the real estate market. Here are 3 of the most critical changes so far.
Debt shift towards senior population
While the percentage of debtors below the age of 40 still remains as it was even a decade ago, the trend is shifting when it comes to older population (50 years and above) when it comes to mortgages. It might be prudent to note that it is quite expected for citizens within the age of 20-49 to have one or more open mortgages. This range of people is juggling a family life, education loans, and all while they are still working towards attaining their peak income potential. However, for citizens above the age of 50, the trend should have been declining but since 2005, the percentage of 60 years and older people opting for higher mortgages continue to rise.
Rethinking mortgage strategy for 20 year olds
For 20 year olds the graph has been declining when it comes to opting for higher credit card debts. However, even in real estate mortgages, there is no viable increment since 2005. The trend for 20 year olds is highest when it comes to student loans. It might be noted that college graduates are most likely to be a part of this debt scenario. Quite obviously since, they have to deal with major education loans, their credit reports often make it riskier for them to obtain low interest mortgages.
Credit card debt trend and does it actually help you?
Even for real estate debt applicants it is important to plan for their credit core. While most 20 year olds today show a trend of declining the plastic power of credit cards. It is a direct result of the trend of education loan mentioned above. If the applicant were responsible about money, it would seem dangerous for them to opt for credit cards with the risk of running up higher credit tabs and ruining their credit scores.
On the other hand, credit cards can actually help boost your credit scores with responsible handling. This boost is unavailable on any other avenues. Credit cards also bring reward points and cash back opportunities that can compound up to a high average. With older clientele, credit cards are still popular and a necessity.
Finally, these trends show a remarkable responsibility in matters of money handling across various age groups. This is primarily because the advent of technology ensures that consumers are now better informed and better equipped for decisions accordingly. Applying for a pre-evaluation of mortgage rates before house hunting is the wisest thing to do. This is especially true if you are also part of the trend and juggling multiple debts.
The author is a well known expert in the field of Calgary real estate MLS. She has taken a view of the changing trends in debt and borrowing habits with reference to the Real estate market to help new buyers while investing.
Article Source: http://EzineArticles.com/?expert=Regina_Francis_Drew
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