Data collected by Costa Mesa-based Experian shows that the average credit-card debt and payment in Orange County rose steadily from spring ‘07, when subprime lending imploded and the credit crunch began, to February ‘08.
The growth coincides, more or less, with declining home prices and lenders putting restrictions on home equity loans, which some owners used to finance big expenses — think new SUV or kid’s college education.
In February, the average debt, which also includes auto loans, was $25,211, up 11% since April ‘07, and the average monthly payment was $1,233, also up 11% in same period. (The totals may include other types of revolving credit and fixed-debt payments, except home loans.)
Note: Experian just provides the numbers, no analysis on why the figures are rising.
By the way, to learn what Experian found O.C. folks will use their tax refunds on CLICK HERE.
No surprise there.
why would people so happy to see other people being laid off and lose their home?
they are as greedy as some of the investment bankers, mortgage brokers and speculators.
this is what i call a hypocrite.
I don’t have a problem with someone losing their home that lied on their mortgage application or weren’t smart enough to understand the terms. When I bought my house there was a 5 page back section that stated what my payments were going to be every month for the entire 30 years. I’m quite sure that still existed over the last 7 years. At this point houses are artificially high preventing honest hard working renters that have been playing by the rules and saving money to get into a starter home. Besides, after foreclosure they can join the renters status with us and do it the right way instead of cutting in line like they did before.
Moral of this credit crisis story: if you cannot easily afford the payment for a 30-year fixed loan on the home you’re trying to buy, you are buying a home that is much too expensive for your budget.
People who were spoiled by the easy money of the past 8-years or more are learning this lesson the hard way. Most people in OC are house poor. That means that they’re paying way too large of a percentage of their monthly income to their home payment and they do not have enough money for other areas of their life like retirement, vacations, college, etc. Just because FHA will give you a loan with your debt ratio up to 50%, doesn’t mean you can afford the house payment once the loan funds. Home prices are still way to high in OC compared to incomes. And people are still paying way too large a percentage of their incomes to home payments. 50% of people buying homes in OC should probably buy in the 909 or another state to truly afford a home. That’s just a fact Jack.
David: its even simpler than that.
First time buyers: simply multiply your annual household income by 3.5 and that is the traditional limit you should stay within. If you are savvy with investing and know how to manage risk as an investor, then you can take on more risk. If you have no idea what I’m writing about, then I suggest you refrain from swimming in the same water as investors until you get educated.
Move-up Buyers (everyone can do this): Risk threshold is a personal characteristic - no way to define that for you. You need to define that for yourself and then determine what options fall within that threshold - that is alot of work in itself.
But everyone can do this: determine what mortgage payment you would need to buy the home and pay taxes, PMI, etc. (and remember rates change if you are using an ARM and you had better plan for more than 3 years out if you have kids - use the fully indexed rate). Then deduct what you’re paying now for housing. Now start putting the remainder away in a savings account. Don’t touch it. If its not painful, you are sure to be able to buy. If its painful - then you need to ask yourself and your family some serious questions to decide if the trade-off is worth it.
If you cannot save money - then you need to work on something else besides thinking of buying a home.
DON’T LET SOME IDIOT THAT COULD NOT CARE LESS ABOUT YOUR FAMILY, MUCH LIKE MYSELF, TO DECIDE OR INFLUENCE YOUR DECISION.
Anyone that was influenced by anyone else to buy is a pure idiot and deserves the fallout they receive.
1 in 5 say their stimulus check is going to pay a housing cost?!?!
In OC I’ll bet that will be 99 out of 100.
I’m sure the 3 people who like hocket in OC are excited. LOL
What are you reading, truthi? None of the comments mentions anything about being happy anyone is being laid off or losing their home. Not feeling sorry for people who made bad choices they could have avoided had they paid attention or not gotten caught up in the mortgage-at-any-cost mentality—that’s the only type of thing I see in the comments. And, that’s not hypocritical.
Dave Ramsey’s got it right. People need to stop using credit save for things if they really want ‘em.
Dave Poggi,
How refreshing to hear your points of view. AGAIN. It’s been so long. It works for you.
“Most people in OC are house poor.”
Poggi’s got a unique perception of reality based on his lack of ability to buy in OC. He thinks IE real estate is a good investment and should start going up in a year or so while OC continues to crash. In other words, he is delusional.
JW, your comment doesn’t make sense. Is that your way of insulting me because you don’t like what I say? If so, wahhhh! Grow up please.
Liar Loan, your opinion doesn’t really matter because you are flat out wrong. I already have the market data to prove it. I will have instant equity when I buy my condo because market value is much higher than what I’m paying for my foreclosure. And the market is already starting to turn in my future city since values already plummeted close to 50%. If you think values are not going to fall farther in OC, you’re the one who’s delusional. I think real estate in OC is a long-term good investment, but only for people who purchased before about 2001 or someone who’s smart enough to wait for the upcoming bottom in the new market. Common sense baby. Grow some!
DP, read between the lines. I have watched you grow and you’re still the same. Things haven’t changed with you.
I’ve always made sense. Some of you guys are finally figuring this out.