Don’t think you can afford the payments on a 15-year mortgage or a 30-year mortgage? Don’t worry. You might qualify for a 40-year mortgage. This type of mortgage works just like a mortgage of a shorter length, but it stretches your required monthly payments over four decades instead of three (or fewer).
Does this option sound too good to be true? There are certainly benefits to a 40-year mortgage. But there are also negatives (such as the fact that it will take you an incredibly long period of time to pay the mortgage in full).
The bottom line is that some people would not be able to afford to purchase a home without the 40-year mortgage option – which makes it an ideal solution for individuals who want to stop paying rent to a landlord every month and finally purchase the home they’ve always wanted.
Following are several of the pros and cons of a 40-year mortgage. Make sure to consider all of these facts before opting for this type of mortgage. It’s also a good idea to discuss this option in more detail with your mortgage broker before making your final decision.
Pros of a 40-Year-Mortgage
- Lower monthly payments mean more money will be available each month for paying bills and other monthly expenses.
- Allows you to purchase a more expensive house than you might not otherwise be able to afford.
- If the mortgage is a fixed interest rate, your rate will not fluctuate for 40 full years.
- Can be an excellent option for people who intend to live in the house for many decades.
- There may be tax advantages due to the interest paid on the mortgage – especially in the loan’s earliest years.
Cons of a 40-Year-Mortgage
- The interest rate might be higher than you’d be able to find on a 15-year or 30-year mortgage
- It will take you longer to build equity in your home.
- Many lenders do not offer a 40-year mortgage option
If you are looking for an affordable way to purchase a home, a 40-year mortgage might be the perfect choice for you. Make sure to ask your mortgage broker for more information about this type of mortgage. Many mortgage brokers do not bring up the 40-year mortgage option unless their clients specifically ask about it. However, a 40-year mortgage is growing in popularity – so it is not as uncommon as it was a decade ago.
If you would like more information about a 40-year mortgage, please contact The Home Loan Arranger today at 1-877-938-7501 to schedule a free consultation.