{"id":1725,"date":"2018-05-20T10:07:58","date_gmt":"2018-05-20T10:07:58","guid":{"rendered":"https:\/\/dreamhomefinancing.com\/\/?page_id=1725"},"modified":"2023-12-09T18:39:02","modified_gmt":"2023-12-09T23:39:02","slug":"40YearMortgage","status":"publish","type":"page","link":"https:\/\/dreamhomefinancing.com\/40YearMortgage.aspx","title":{"rendered":"40 Year Mortgages – Best Lenders – Get Approved"},"content":{"rendered":"

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40 Year Mortgages – Lender Options<\/h2>\n

Some home buyers are looking to keep their payments lower for cash flow purposes or to qualify for a larger mortgage amount. A 40 year mortgage is a good way to lower your monthly payment while maintaining the long term security of a fixed rate. [\/vc_column_text][vc_empty_space height=”20px”][vc_column_text]<\/p>\n

What is a 40 Year Mortgage?<\/h3>\n

A 40 year mortgage is a fixed rate mortgage with principal payments spread out over 40 years. The program is chosen by borrowers because the monthly payments are lower.\u00a0 It is a non qualified mortgage that is offered by niche lenders and both the down payment and interest rate may be higher than conventional and FHA loans.<\/p>\n

How a 40 Year Mortgage Loan Works<\/h2>\n

A 40 year mortgage gives you an even lower payment than a 30 year fixed term by stretching out the amortization schedule over a longer period of time while maintaining the stability and security of a fixed rate.<\/p>\n

Some lenders offer the option of having a true 40 year mortgage term, or mortgage that is amortized over 40 years, but due in 30 years. With the second option, you must either pay the mortgage in full after 30 years, or refinance the loan. The actual balance due after 30 years will vary depending upon how much additional principal you have paid during the 30 year term.<\/p>\n

A\u00a040 year mortgage\u00a0offers low payments similar to that of an\u00a0adjustable rate mortgage<\/a>, but gives you the security of a\u00a0fixed rate<\/a>\u00a0and payment over the life of the loan, regardless of how high interest rates get. You can also build equity in your home at a faster pace than other low payment loans.<\/p>\n

Another benefit of a 40 year mortgage is you can increase the amount of home you can afford and the amount of extra cash you have on a monthly basis. The more cash you have in hand, the more you can put toward your savings or invest in your 401k or retirement fund.<\/p>\n

For example, if you had a $200,000 30 year mortgage and spread it out over an additional 10 years, your payment might drop by $100 per month. Imagine what that extra $100 could do for your retirement fund or to pay down high interest consumer debt.<\/p>\n

Click to be connected to a lender that offers 40 year mortgages in your state.<\/span><\/strong><\/span><\/a><\/span><\/p>\n

Who Is a Good Candidate for a 40\u2013Year Mortgage?<\/h3>\n

A\u00a040 year mortgage\u00a0is great for people in high cost housing where the average growth in property value is surpassing the average growth in income.<\/p>\n

It can help keep your payments low much like an\u00a0interest only loan<\/a><\/span><\/strong>, but with the stability of a fixed interest rate and monthly payment. These longer term mortgages are very beneficial for people who don’t plan on moving any time soon.<\/p>\n

Another candidate for a 40 year mortgage is anyone who prefers to invest the principal payments rather than pay down the mortgage balance. When interest rates are low, it may be advantageous financially to use the funds for investments that will yield a higher rate of return versus the interest rate on the mortgage.<\/span><\/p>\n

Benefits of a 40 Year Mortgage<\/strong><\/h2>\n

These are just a few of the many benefits of a 40-year term.<\/p>\n

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  1. It has a balloon payment at the end of 30 years. You can either pay off the remaining balance or refinance your loan.<\/li>\n
  2. You can build equity faster with a 40 year mortgage than with an interest only loan.<\/li>\n
  3. You can divert the principal payments to investments or to pay down high interest credit card debt.<\/li>\n
  4. Real estate investors prefer this loan due to the increased monthly cash flow.<\/li>\n
  5. The rate will be fixed for the life of the loan.<\/li>\n<\/ol>\n

    A long-term 40 year mortgage can offer you more buying power because it gives you lower payments than a traditional 30 year mortgage. Its an ideal loan for home buyers in a high cost housing market. A 40 year mortgage provides a great alternative for people who want to avoid adjustable rate mortgages<\/a><\/strong>\u00a0<\/span>or\u00a0interest only loans.<\/p>\n

    Cons of a 40 Year Mortgage<\/span><\/h3>\n

    These are some of the cons or negatives associated with a 40 year mortgage:<\/p>\n