Southern New Jersey Overlook

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40-year Mortgage Loans: Who Can Best Benefit?

Borrowers who face affordability issues and think homeownership is beyond their reach, first-time homebuyers, or those living in high-cost areas seeking manageable monthly payments may find 40-year Mortgages attractive.

The 40-year Mortgage is eligible on both standard fixed-rate products as well as our standard 3/1, 5/1, 7/1 and 10/1 hybrid ARMs.  Keep in mind that over the length of the loan, you will be paying a signicantly higher amount of total interest than for 30-year or shorter mortages.

This is best for those that are looking at a long-term investment. Just be aware that many 40-year mortgages have a balloon payment due after 30 years. Make sure you check it out thoroughly before you sign.

Here are some links to articles discussing the pros and cons of 40-year mortages in more detail:
Military Money
The Statesman re: Bankrate.com
Bankrate.com
Bankrate - Older Article
Your Next Broker


Note: 50-year mortgages have started to appear.
 
 
 
Visit my web site for additional resources and services: http://www.LawrenceYerkes.com

and visit BestHomes-NJ.com for the latest New Jersey Real Estate property listings (residential, commercial, multi-family, farm, land)

Copyright 2006 by Timon, Inc. All Rights Reserved.
3 comments • Lawrence Yerkes - Broker Associate, Southern New Jersey Real Estate Services • August 29 2006 12:16AM

Comments

In some areas as home prices soar above level of income, these have become a useful tool in providing clients with a level of affordability they would otherwise not have.  Remember the days when a 8 year note on a car was unheard of?  While a 40 year mortgage helps buyers with more affordable payments, educating consumers on their options and on their ability to pay ahead to pay off their mortgage faster is ultra important in a long term & savvy financial gameplan.
Posted by Jason Sardi (I love kittens cute & My Jennifer!!) over 5 years ago
We have just seen the emergence of the 40 year mortgage here in Canada and not a moment too soon. Housing prices are sky rocketing and without the 35 and 40 year mortgages, the best a first tome buyer could hope to afford is a condominium. The 40 year amortization benefits the younger buyers who would not otherwise be able to afford to purchase a home.
Posted by Delete Account over 5 years ago

Just because a 40 amortization rate is possible doesn't mean that home buyers should stop aiming for 25% down on 25 years. I understand it's an issue of affordability and 'getting into the market', however, it's never wise to bite off more than you can chew...

Posted by Ryan Windsor (RE/MAX Crest Realty (Westside)) over 5 years ago

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