Thinking About A 40-Year Mortgage: How to Decide Whether or Not It Is Worth It

By
Mortgage and Lending with and for 1st Time Buyers, Move Up Buyers & Investors 207897nmls# DOC#207897
https://activerain.com/droplet/4lGZ

Thinking About A 40-Year Mortgage: How to Decide Whether or Not It Is Worth It

 

 

Is a 40-Year Mortgage Worth It? How to Decide Whether or Not This Longer Term is Right for YouThere are different timetables for mortgages. The most common types are 15-year and 30-year mortgages. However, a mortgage broker can establish unique timetables for a homeowner, such as a 40-year mortgage.

Friends may recommend going for a long-term timetable, but what do professionals think of a 40-year mortgage? Here is what you may want to consider to see if a 40-year mortgage is appropriate for you.

The Monthly Rates Will Be Low

Compared to a 15-year or a 30-year mortgage, the monthly payments for a 40-year mortgage will be lower. Since the mortgage is spread over 10 years beyond a conventional 30-year mortgage, homeowners will see much lower mortgage payments per month. This can be very attractive for homeowners who need to control their housing costs per month.

Long Term Costs

But, many brokers will tell a homeowner the extra 10 years is not worth it. Because the homeowner will need to pay interest rate charges each month for 10 extra years beyond the typical 30-year mortgage window, the homeowner will end up paying more in interest for a 40-year mortgage. Even with a low, fixed interest rate, homeowners are still extending their home payments by a whole decade, which will add up in the end.

Always Fixed

Under housing laws, a 40-year mortgage must always be a fixed-rate mortgage. This can be attractive for many homeowners since it guarantees that the mortgage payment per month will be the same for the next 40 years. For those on a budget, knowing ahead of time what they owe per month for 40 years can help them prioritize their payments.

Home Of One’s Dreams

Since the 40-year mortgage will calculate as a lower monthly payment for an already credit qualified candidate, a broker will be more willing to offer a larger mortgage to the candidate. This means that many people who utilize the 40-year mortgage have a larger pool of homes to choose from. Of course, it is important to find a home within a reasonable budget.

Understanding the ramifications and specific issues with a 40-year mortgage can help a homeowner candidate better decide if it is right for them. Like any housing finance option, there are advantages and disadvantages, so knowing how the 40-year mortgage works is important. This information should enhance the home shopping experience and help the candidate and the broker find the best home under the most appropriate financing option.

Talking to a trusted mortgage should always be your first step in the process.  Please contact the Mark Taylor Team at 602.361.0707 or by email at mark@awesomerates.com We appreciate you taking the time to read, comment and re-post today's blog on:

Thinking About A 40-Year Mortgage: How to Decide Whether or Not It Is Worth It

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Lending / Financial
Groups:
Mortgages
Realtors Needing the services of the Lending Powers
Posts to Localism
Mortgage Bankers
Addicted to Active Rain
Tags:
az
ca
fha
investor
usda
mortgage loans
jumbo
arizona mortgage
conventional
hud
va
mark taylor
harp 20
themortgagemoment

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
835,535
David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct

Interesting, most of my clients prefer a 15 or 20 year mortgage to build up equity faster and pay less in interests over the life of the loan.

Aug 07, 2014 12:25 AM #1
Rainmaker
196,697
Jim Cramer
EXIT Preferred Realty - 2021 E Main Street, Waynesboro, PA 17268 - Waynesboro, PA
A Preferred Professional

In my opinion it is not worth it.  I am currently eyeing when my mortgages will be paid off on my properties.  I would not even want to think of adding another 10 years to them.  Thirty years is a long time.

JimCramerRealtor

Aug 07, 2014 03:49 AM #2
Rainmaker
1,317,515
Jeff Jensen
The Federal Savings Bank/Lending in 50 states - Greenwich, CT

I have never been willing to saddle a buyer with a 40 year mortgage.

Aug 07, 2014 07:59 AM #3
Rainmaker
971,895
Christopher Lotte
Red 1 Realty - Lithopolis, OH
Central Ohio Realtor, 614-390-9243

Hey ,

very clever... greta post! keep it posting...

have a great day!...

Aug 18, 2014 11:16 PM #4
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Ambassador
1,426,917

Mark Taylor Mortgages

602-361-0707 #MarkTaylor #Awesomerates NMLS#207897
Need a Mortgage Rate Quote?
*
*
*
*
Spam prevention

Additional Information