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Parents are having a tough time saving money. Fifty-one percent of parents recently surveyed say their mortgage was having a “major impact” on their ability to save, according to Bankrate’s Money Pulse survey for February.
“It’s probably not as much about the mortgage as it is that stage of life,” says Jonathan Smoke, realtor.com®’s chief economist.
Homeowners with children are likely to be in their early 30s to mid 50s and have many financial goals. They’re not only tending to the needs of their children but also saving for college and retirement, maintaining a home, and paying the mortgage.
Jim Sahnger with Schaffer Mortgage in Palm Beach Gardens, Fla., says parents may need to change how they think of mortgage payments: It’s not just another form of paying off debt but it’s a form of savings.
“If you look at it from the aspect of you’re building equity, that’s obviously important,” Sahnger says. Further, homeownership can help shield you from rental cost increases, and there are tax benefits to owning, he adds.
Two in three parents who don’t own a home say that financial issues such as poor credit or being unable to afford the down payment are preventing them from buying.
The Bankrate survey also found that 15 percent of Americans say they’re very or somewhat likely to purchase a home this year, with older millennials (ages 27 to 36) and Generation Xers (ages 37-52) showing the greatest likelihood of buying.
Source: “Parents Have Trouble Saving Because of Mortgage Payments, Bankrate Survey Finds,” Bankrate.com (February 2017)
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