40-Year Mortgage: What It Is, Pros and Cons
AuthorKelsey Heath. Date:
We have all heard of the traditional 30-year mortgage, which most home buyers sign up for when they purchase a house. But did you know that you can finance your home purchase with a 40-year mortgage? A 40-year mortgage is an extended loan option that spreads repayments (known as amortization) over 40 years. By extending the loan term, principal and interest payments are spread out over an additional 120 months, which means that monthly payments decrease. A 40-year mortgage can make buying a house more affordable without signing up for an interest-only mortgage. However, the longer term also means higher total interest paid over the life of the loan and slower equity build-up. In this article, we will discuss a 40-year mortgage, its benefits, and its downsides. What is a 40-Year Mortgage? A 40-year mortgage is a home loan with a 40-year repayment period. In financing terms, the loan is … Continued
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