By increasing the standard loan term from 30 to 40 years, monthly payments are lower, thus making them more affordable, and increasing borrowers' purchasing power. This mortgage is ideal for borrowers who face affordability issues and think homeownership is beyond their reach. First-time homebuyers, or those living in high-cost areas seeking manageable monthly payments may find this amortization term attractive. The 40-year Mortgage is eligible on both standard fixed-rate products as well as our standard 3/1, 5/1, 7/1, and 10/1 hybrid ARMs.
The 40-year Mortgage is ideal for borrowers who face affordability issues and think homeownership is beyond their reach. First-time homebuyers, or those living in high-cost areas seeking manageable monthly payments may find this amortization term attractive. In addition, the fixed-rate option may appeal to financially conservative borrowers who prefer lower monthly payments along with the stability of a fixed-rate, fully amortizing mortgage.
By amortizing the mortgage over 40 years rather than the standard 30-year term, monthly payments are lower.
A 40-year term helps address affordability concerns and may make it easier to qualify for a mortgage.
The lower payments of the 40-year term can help borrowers qualify for a larger loan amount than the 30-year fixed-rate would allow.
This mortgage offers borrowers a way to use their mortgage as part of an overall financial management strategy. The borrower can utilize monthly payment savings to pay off higher-cost debt, or invest the savings elsewhere.