In the past when difficult financial times hit the priorities were simple. You pay your mortgage first and then you pay whatever else you have the money for.
However, recently that scenario has changed. More and more people are paying their credit cards first and letting their mortgages slide. In fact during the 3rd quarter of 2009, estimates were that 6.6% of consumers were delinquent on their mortgages but still current on their credit cards while just 3.6% were the opposite, delinquent on their credit cards but current on their mortgages.
The change can likely be attributed to the fact that home prices are plunging. It is much easier to walk away from a home mortgage when you know that you are not building equity. In fact, when you owe more than you could possibly sell the home for, it may actually be in your best financial interest to walk away. Unfortunately, many people may be trying to hold onto their credit cards because that is the only way they are keeping up with daily expenses.
What we all need is for the recession to completely turn around, send everyone back to work and of course, repair everyone’s credit to get things moving again!
For further information see Consumers paying credit cards over mortgage.
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