According to RealtyTrac.com, the national foreclosure rate in the US increased 19% in January to the rate of 1 foreclosure per 866 households.  A table from their website that shows the foreclosure rate by state can be seen at http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=1907&accnt=64847.  States with higher-than-average foreclosure rates included Nevada, Michigan, Georgia, Colorado and Arizona, each with more  than 1 foreclosure per every 550 households

 

These statistics are a reminder about how the Bible instructs us to be cautious debtors.  For example, Psalm 37:21 states "The wicked borrow and do not repay, but the righteous give generously".  Also, Proverbs 22:7 reads "The rich rule over the poor, and the borrower is servant to the lender".

 

Before taking out a mortgage, we recommend that the mortgage (P&I, homeowners insurances and taxes) should not take up more than 25% of your monthly take home pay.  Remember, banks will often approve you for a mortgage that has a higher percentage, but this does not mean that the home is easily affordable.  You need to leave margin in your budget for extraordinary expenses; if housing takes up too much of your month-to-month pay, then it will increase the chances that credit cards will be required to make up the shortfall.