Obtaining a mortgage requires a good amount of research. How long should your mortgage be? What provider should you use? The questions can seem endless. If you’re considering a 40-year mortgage, read on for a bit of valuable insight.
Benefits of a 40-Year Mortgage
The main reason buyers sign on for these types of loans, which add 10 years to the traditional 30-year mortgage, is to take advantage of smaller monthly payments.
Drawbacks of a 40-Year Mortgage
However, the shorter-term loan is usually more advantageous for the homebuyer. The drawback becomes apparent simply by calculating the cost of additional interest payments, which can total thousands for the privilege of just saving the difference of a few dollars in monthly mortgage payments.
But for those with a less reliable cash flow, or who have a limited income, a 40-year commitment can be enticing, especially if a shorter-term mortgage is financially not an option.
Learn More about Mortgages
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