2007-08-12 12:09:56 · 6 answers · asked by rocd 1 in Business & Finance ➔ Renting & Real Estate
Yes, there are 40 year loan programs available. I have never done one for my clients because there is not a significant change in the payment to justify adding 10 more years to their term.
2007-08-12 13:12:47 · answer #1 · answered by yourmtgbanker 5 · 0⤊ 0⤋
Yes there are 40 year mortgages as well as 50 year mortgages. They will become more and more popular as the price of houses go up.
The longer the terms of the mortgage the less the monthly payments. The interest rate normally have nothing to do with the terms of the mortgage.
Long long ago there were no 30 year mortgages. When they went into effect lots of individuals said why would a person want a 30 year mortgage as they are now saying about the 40 and 50 year mortgages.
Pretty soon the 40 and 50 year mortgages will become a staple item as the 15, 20, and 30 year mortgages are today. This product might determine if you can qualify for a mortgage and purchase a house or continue to rent.
There are a few companies that are using them, though all the lenders have them available for consumers, if they desire them. I persosnally think both the 40 and 50 year mortgages are excellent products.
As soon a the mortgage brokers and agents realize this is an excellent tool they will be better of and able to offer their clients a quality product that will put them in a house they can afford, instead of forcing the 30 year down each client's throat.
I hope this has been of some use to you, good luck.
"FIGHT ON"
2007-08-12 12:44:22 · answer #2 · answered by loanmasterone 7 · 0⤊ 0⤋
Yes. The 40 year is becoming a more popular product these days. The difference between the 30 year and the 40 year are not huge, but there is a difference. If you plan on staying in the home for the full term, I would go with the 30 year or even less. However, if you are only going to be in the home for a short amount of time, finance it for as long as the bank will allow. The nice thing about the 40 year is that it gives you the security of knowing your rate is fixed while giving you some savings at the same time, unlike an adjustable that is only fixed for a period of time. Below is an example of the 40 year vs. the 30. you can judge for yourself if it's for you or not based on the amount of time you're planning on being in the property.
Example:
300k loan amount at 6.75% over 30 years = 1945.79 pmt (PI)
300k loan amount at 6.75% over 40 years = 1810.07 pmt (PI)
The difference in this example is 135.72 per month.
I hope this helps, and good luck.
2007-08-13 10:59:42 · answer #3 · answered by Anonymous · 0⤊ 0⤋
There are 40 year loans, including conforming loans. The longer the loan term the lower the payment - but also the more interest you pay and the slower (obviously) that you pay off the principal.
Usually, there is not a significantly lower enough payment to justify moving from a 30 to a 40 year amortization period.
2007-08-12 13:01:16 · answer #4 · answered by Anonymous · 0⤊ 0⤋
There are a few around, but the payments are not much lower than on a 30-year mortgage, especially if written when interest rates are high. So they are seldom used.
2007-08-12 12:30:08 · answer #5 · answered by Anonymous · 0⤊ 0⤋
YEs, but if you need one you are buying too much house.
2007-08-12 12:12:48 · answer #6 · answered by Anonymous · 1⤊ 1⤋