As I was doing my morning market research I came across an article on tax filings and it’s relationship to delinquent mortgages. According to Black Knight Data & Analytics, there has historically been a distinct correlation between income tax refund disbursements and delinquent mortgages becoming current in the US. Wow, I thought only Macy’s stock and tax refunds were directly correlated! But that’s just me.
Looking at IRS filing statistics, they found that nearly one in five Americans file their returns within the first two weeks of tax season, and over 40 percent had completed their taxes by the first week in March. And not surprising, not only were Americans who filed early more likely to receive a refund than those filing later, but they also received larger refunds on average.
Apparently delinquent borrowers who bring themselves back to current status spike during February and March, suggesting that some portion of Americans are using their tax refunds to make past-due payments on their mortgages.
With this in mind I always tell clients it’s best to make sure you are “comfortable” with your mortgage payment when you buy. You never want to make yourself “house poor”. Your house is your castle, but you don’t want to end up being a prisoner to the payment. Food for thought ~~~
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