An article by Michael Neal published on the National Association of Home Builders (NAHB) website, reveals that overall consumer debt fell in the second quarter of this year, but only due to decreased mortgage and home equity lines of credit (HELOC) balances. Other forms of consumer debt, including auto loans, student loans, and other credit card debt increased. The decreased mortgage-backed debt, however, was enough to reduce the average American’s overall indebtedness.
It’s important to keep in mind that your current debt level, in addition to your income and credit score, are key determiners of your ability to qualify for a mortgage.
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(This report is based on Federal Reserve Bank of New York data.)