Are You Ready for a 40-year Mortgage?Real estate prices have been increasing steadily over the last five years, particularly on the East and West coasts. In parts of California, homes are selling for 33% more than they were a year ago. This has made it more difficult than ever for first-time homebuyers to purchase a home. Over the years, a number of new mortgage options have become available to prospective buyers that ease the burden of buying a home. Buyers can now obtain a mortgage with a variable interest rate that rises or falls with the market or even a mortgage that requires only interest payments for the first few years of the loan term. This allows buyers to make smaller payments early in the repayment schedule while purchasing a more expensive home than they otherwise might be able to afford. The payments would increase in later years, but so, presumably, would the income of the buyers, so that the home would still be within the buyers' range of affordability. A relatively new mortgage option that may soon adjustable rate mortgage and the interest-only mortgage in popularity is the mortgage with a 40 year term. While most mortgages offered today are for either 15 or 30 years, the 40 year mortgage has been available for nearly 20 years, but few lenders offer it as an option, as they are often reluctant to tie up their money for such a long period of time. That may change, however, as Fannie Mae has announced their intention to purchase more 40-year mortgages. With Fannie Mae purchasing more 40-year mortgages on the secondary market, lenders will probably be more willing to offer them to customers. Interest rates will likely be somewhat higher for a 40-year mortgage than a 30-year mortgage, but the extra length of the loan term will keep the payments lower than with a traditional mortgage. Prospective buyers should be aware that they will pay more in interest on a 40-year mortgage than they will on a traditional 30-year note. Studies show that most homebuyers do not stay in their homes for anywhere near 30 years, let alone 40. This being the case, the market for 40-year mortgages may remain fairly small. But for some buyers, it may mean the difference between continuing to rent and buying the home of their dreams. ©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation information and HomeEquityHelp.net, a site devoted to information on home equity loans.
MORE RESOURCES updated Sat. April / 20 / 2024 VA Loans: What They Are And How To Qualify Bankrate.com 15-Year Mortgage Refinance Rates: Compare Current Rates Business Insider How to Refinance Your Mortgage NerdWallet 30-Year Mortgage Refinance Rates Business Insider Loan Modification Vs. Refinance Bankrate.com Average Mortgage Interest Rates: Mortgage Rates by Credit Score, Year, and Loan Type Business Insider Mortgage Interest Rates Today, April 19, 2024 | High Rates Make for a Challenging Homebuying Season Business Insider Types of Mortgage Refinance Options Bankrate.com How To Get The Best Refinance Rate Bankrate.com How To Get A Home Equity Loan With Bad Credit Bankrate.com The best mortgage lenders for refinancing in April 2024 CNN Underscored Mortgage Interest Rates Today, April 16, 2024 | Rates Remain Elevated After Last Week's Spike Business Insider Mortgage Interest Rates Today, April 15, 2024 | Rates Are High, But They Still Could Drop This Year Business Insider With property values strong in 2023, many homeowners tapped home equity lines of credit, pushing total HELOC ... Miami Herald Best Mortgage Refinance Lenders of April 2024 Business Insider Best Mortgage Refinance Lenders In 2024 Bankrate.com Current mortgage refinance rates CNN Underscored How To Refinance A Rental House Bankrate.com 280 Park Ave.'s owners refinance mortgage and pay down debt Crain's New York Business Bain Proposes Japan's Kioxia IPO to Clear $5.8 Billion Loan Refinance U.S. News & World Report Mortgage Refinance Rates: Compare Current Rates Business Insider MBA: Mortgage Applications Increased in Weekly Survey Calculated Risk When to Consider Refinancing Your Mortgage Business Insider Mortgage Rates Chart | Historical and Current Rate Trends The Mortgage Reports 30-year refinance rates: What to know CNN Underscored Mortgage Rate Forecast April 2024 Bankrate.com Refinancing a Home Equity Loan (2024 Guide) MarketWatch Refinance Requirements: What You Need to Refinance Your Home in 2024 The Mortgage Reports Cash-Out Refinancing: How It Works, When To Do It Bankrate.com Mortgage Rate History: 1970s to 2024 Bankrate.com Current 15-year refinance rates — and lenders that offer them CNN Underscored How Soon Can You Refinance a Mortgage? NerdWallet Conventional Refinance Rates and Guidelines for 2024 The Mortgage Reports How To Refinance An Underwater Mortgage Bankrate.com Should You Refinance Your Mortgage In 2024? Bankrate.com Mortgage Interest Rates Today, April 14, 2024 | Will Rates Still Go Down This Year? Business Insider When to Refinance Mortgage: Is it Time? - Buy Side from WSJ The Wall Street Journal Will Mortgage Rates Go Down in 2024? What Homebuyers Should Expect Business Insider Best Refinance Lenders of April 2024: Refinance Your Mortgage The Motley Fool Pros and Cons of a Cash-Out Refinance Bankrate.com What Credit Score Do I Need To Refinance? Bankrate.com Should I Refinance My Mortgage Now? When to Refinance As Rates Drop Business Insider Office of Research blog: A look at cash-out refinance mortgages and their borrowers between 2013 to 2023 Consumer Financial Protection Bureau
|