People who purposely default on their mortgage have gotten a lot of attention in the past few years, but only a tiny percentage of North Texans think such action is ever justified, according to a Texas Trust Credit Union survey of homeowners.
In the survey of more than 2,700 homeowners in the Dallas-Fort Worth area, respondents were asked whether it is justified for someone to stop paying their mortgage if they decide their home is worth less than they owe, or if they are having financial problems.
The survey found that 97% of homeowners said stopping mortgage payments is not justified simply because of an “underwater” valuation on their home. In the case of financial difficulties, 94% said that those problems would not justify halting mortgage payments.
“People clearly have a deep sense of obligation when it comes to the financial commitment they have made to their mortgage lender,” said Richard Whitman, vice president of mortgage lending at Texas Trust, about the survey results.
“We have all heard stories about people who walk away from an underwater house or who decide to balance their household budget by simply cutting out mortgage payments. The positive feedback from this survey is that almost everyone agrees that is wrong,” Whitman said.
Texas Trust CU is the largest credit union mortgage lender in Dallas-Fort Worth, according to the Dallas Business Journal. The credit union conducted its homeowner survey in late May to gain insight into the local mortgage landscape and individuals’ attitudes about home loans.
Other notable findings in the survey include:
Most people surveyed see the housing market improving. More than three out of five—61%—believe their home has increased in value in the past year, while 39% did not think so.
88% of surveyed homeowners with mortgages are paying interest rates of 3% to 8%. Some 9% of homeowners have loans with interest rates below 3%, but 3% are burdened by loans with interest rates of 9% or higher.
60% of homeowners are paying, or have paid, extra toward the principal on their loans to reduce the loan principal and the total amount of loan interest, and to shorten the term of the loan. Of those, 46% said they make such payments whenever they have some extra money, while 39% add to their payment each month. Another 9% make two payments each month, while 6% add extra to their payment once a year.
37% of homeowners with a mortgage say they have refinanced within the past five years. Of the 63% who have n0t refinanced, the leading reasons cited were: they already have a good interest rate, they cannot afford closing costs, they have other personal debt to deal with, or they just do not see the benefit.
