overleveraged

With mortgage rates at historic lows, many people might be tempted to buy a home before they’re financially ready.

In order to determine where homeowners have the most unsustainable mortgage debts in the country, WalletHub recently released the 2017 Home Overleverage Report. Their analysts compared the median mortgage debt to the median income and median home value in more than 2,500 U.S. cities.

Dallas did not fare well when it comes to overleveraged mortgage debtors.

“Dallas ranked fairly well when compared to other major cities as it has an affordable median house value at $135,400,” said WalletHub analyst Jill Gonzalez. “However, the median earnings per individual are fairly low at just $27,935, which makes it harder to pay off a $131,144 median individual mortgage debt.”

Many residents are simply taking on more mortgage debt than they can handle, and putting very little money forward as a down payment.

“Being overleveraged can make it harder for homeowners to make their monthly payments, possibly leading to defaulting on their mortgages,” she said. “The city was ranked and scored based on its mortgage debt-to-income ratio and mortgage debt-to-house value ratio. Dallas’ overall rank is mostly due to its high debt-to-income ratio, at 469 percent.”

(more…)