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Why Homeowners are Losing Sleep Over Rising Debt


debtA third of Americans with credit card debt are losing sleep over it. Yet, they are at a loss as to how to optimize their finances, according to a survey titled “Climbing out of Debt: Finding Solutions for High-interest Problems,” released by the mortgage lender and servicer Mr. Cooper [1] on Tuesday.

The nationwide online survey of more than 1,000 Americans with more than $500 in credit card debt was conducted in April covering U.S. Adults aged 18 years plus. It revealed that a third of the respondents said that they were losing sleep thinking about their debt situation and nearly a quarter of those with a spouse or partner said that their debt negatively impacted their relationship.

While it’s clear that they want out from the debt trap most respondents, the survey said, didn’t know how. The survey revealed that more than two-thirds of respondents said that it would probably take them over six months to pay off credit card debt, while 15 percent expected it to take more than five years. Around 8 percent said they would never be able to pay off their debt, while 19 percent weren’t aware of the interest rates on their main card.

“Americans’ credit card debt is skyrocketing, hitting a record high of $1 trillion earlier this year, and they’re feeling stressed. But homeowners have options available to help them get out of this high-interest debt,” said Jay Bray, Chairman, and CEO of Nationstar Mortgage Holdings, the holding company for the Mr. Cooper brand.

The survey also found that a large majority (77 percent) carried their credit card balance from month to month rather than paying it in full and half of the respondents said that they did not have a budget to curtail on their credit card expenses despite the debt.

Mr. Cooper said that homeowners could look at tapping into their home equity to help them optimize their finances and deal with high-interest debts like credit cards. The survey found that 44 percent of homeowners had more than $100,000 in home equity.

“The Mr. Cooper customer base reflects similar data, with collectively more than $400 billion in home equity or an average of $100,000 per customer,” the company said. “Many homeowners have the ability to use this equity to optimize their finances and save thousands of dollars every year.”

“At Mr. Cooper, we’re dedicated to educating homeowners about how they can use their greatest asset—their homes—to lower their monthly payments, support their financial goals and escape the debt cycle that traps so many Americans,” Bray said.

As part of educating more customers, Mr. Cooper recently announced the upcoming launch of the new Mr. Cooper with Home Intelligence mobile app to help homeowners make informed decisions about their financial health. The app will provide insights into how much their home may be worth, the current state of their home equity and how homeowners can use home equity and refinancing options to save money and get out of debt.

Learn more about home equity:

HELOC Equity Withdrawals Hit a Low [2]