Americans Find Themselves Further in Debt - Now What?

Americans Find Themselves Further in Debt - Now What?

CNN’s recent reporting shows Americans once again find themselves further in debt – Now What? As stimulus money has run out, our appetite for debt has not. USA credit card balances rose by $17 billion in just the last quarter and total debt has increased by $1.1 trillion over pre-pandemic 2019 numbers. At the same time, inflation continues to rise and pushes both home and auto prices even higher. So what lessons can we learn from America’s growing debt?
 

The Debt Hole

Let’s take a look at the debt hole that many are in. As an example, suppose you bought a home in Orange County, CA, in January of 2018 for $420,000 with a 20% down payment and a 30-year mortgage at 3.25%. By making your payments for nearly four years, your loan balance would now be hovering around $310,000. Unfortunately. like many Americans, you have accumulated some credit card debt (family sickness, out of work, car repairs, etc.). Let’s suppose you have accumulated $10,175 in credit card debt, leaving you with minimum credit card payments of $204. In this situation, it will still take you 26 years to pay off your home and over 30 years to pay off your credit cards (at an average interest rate of 18% and making only minimum payments). The good news – you can flip the script and not stay on this plan by reorganizing debt.

Reorganizing Debt

It comes as no surprise that most Americans have some level of debt; in California the average household has $10,175 in credit card debt. While we all would love to be debt-free, that is not the situation many are in. Yet, homeowners today may have a fantastic opportunity to put themselves on a path to become debt-free sooner than they could ever imagine. Let’s look at an example of how reorganizing debt could make this happen.

In this same example, the home purchased in 2018 would now have an estimated value of $558,613. By refinancing into a new 30-year mortgage at 2.99% and taking out enough money to pay off your credit card, you could save yourself an estimated $298 a month in payments (credit card and mortgage payments). Imagine what you could do with that savings? However, one of the most effective, debt reduction options would be to use the savings to pay off your home faster instead of paying the credit card companies. Begin by taking all the monthly savings and paying down the principal balance of your home! Making this one change, which doesn’t even change your monthly budget, would pay off your home in 22 years and four months. This pays off your home nearly four years sooner than the original loan you took out when you bought your home and increase your net worth by $63,291. Click here for details.

Debt Reorganization Expertise

As you can see, there are many factors to consider when reorganizing debt. Refinancing is one option and it would be easy to become overwhelmed during the debt reorganization expertise. The GOOD NEWS – you don’t need to tackle this alone. Let Revival Lending, a Certified Mortgage Advisor, help you! Your dreams are not one-size-fits-all; your loan shouldn’t be either.

Revival Lending, Certified Mortgage Advisors

At Revival Lending, we are Certified Mortgage Advisors. We will work to design a customized loan to facilitate your goals.  We want to earn your business over a lifetime and not just through a one-time transaction. We promise to take the time to truly understand your goals and help you map out a plan to use your mortgage and home to reach them.  Call or email us to schedule a complimentary mortgage review today. You will not be disappointed!

Home Improvements That Pay

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Energy-Efficient Windows

Many home renovations will increase your resale value but home improvements that pay you now are a smart investment. Energy-efficient windows pay for themselves now and when you’re ready to sell!

Older homes typically have windows that are of a single glass pane construction that waste energy and money. They are not energy-efficient at all and are simply barriers to rain and bugs. When you sell, expect buyers to offer less and create negotiation strategies considering they will want to replace them.

You see, today, manufacturers are making double- and triple-pane vinyl windows that insulate the home from wind, rain, cold, heat, and even outside noise. Additional benefits to multi-pane windows include a reduction of dust and allergens, added security for your home, ease of maintenance, and increased curb appeal. Now, let’s talk about the financial impact.

EnergyStar-Rated Windows

Replacing old windows with EnergyStar-rated windows will save money on heating & air conditioning bills. These windows also insulate so efficiently; additionally, green energy tax credits can apply! Next, new windows provide one of the higher rates of returns for a home improvement investment. In fact, a recent report entitled “Remodeling 2020 Cost vs. Value Report”* (www.costvsvalue.com) shows homeowners can expect a 73% return on their project investment when they sell their home.

Home Improvements That Pay for Themselves

While the initial cost for new windows can be high, it is one of those home improvements that pay for themselves in lower energy costs, and they will surely increase the value of your home when you sell!

Need a referral? Give us a call!

*© 2019 Hanley Wood, LLC. Complete data from the Remodeling 2019 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.

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• Certified Veteran Loan Specialists
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Our Commitment

Our Commitment

Buying a Home

Our commitment to you is to support your decision to buy a home. This commitment you’ve made is an incredible accomplishment; a sacred act. It’s the purchase of your sanctuary, the escape from the world‘s turmoil and noise. A space that fosters cherished memories with family and friends. It’s no small act…

The Home Loan Process

The process of obtaining a home loan can be overwhelming—but it doesn’t need to be. At Revival Lending we‘ll  guide you from beginning to end, demystifying the process throughout. We eliminate surprises and offer full disclosure. We pride ourselves with being in constant communication with our home buyers and realtors, proactively updating and educating you throughout the loan process. We value integrity and will always have your best interests at heart. 

We don’t just get you into any loan, together we’ll:

1. Discuss and assess your unique situation

2. Find opportunities to improve your financial circumstances

3. Identify long term plans, goals and dreams, and

4. Work to design a customized loan option that fits all your needs and sets you up for success!

The way we work is not a standard in the industry, excellence is not common. At Revival Lending we help you experience revival in your finances and your life.

Welcome to Revival Lending! 

Your dreams are not one-size-fits-all, your loan shouldn't be either!
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Tyson Hilton
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