40 year home loans are great for people who want lower monthly payments:
Many people want to become a home owner but the monthly payments associated with the home loans may become a hurdle for some people. Fortunately, such people are not without options. There are plenty of choices available for such people who face problems while trying to become a home owner. One of the choice is a 40 year home loan instead of the loans with a 15 year or a 30 year term.
As you could imagine, the unique feature of these longer term loans is the lower monthly payment associated with it. By resorting to these solutions, you will have no problem with your monthly budget and would not be experiencing money shortage at all.
But they are not without disadvantages:
It would not be fair on my part if i did not discuss about the downsides of getting these long term home loans. The major disadvantage is that despite offering a lower monthly payment, at the end of the term, you will actually be giving a lot of money to the lender compared to what you borrowed. By resorting to the shorter term loans, you could have saved money.
Is getting a 40 year home loan really worth the extra expenditure?:
Now that i have told you the benefits as well as the downsides of getting these loans, think for a second about whether it would be suitable for you or not. It all depends on your choice and your situation. If you strongly feel that there is no way you will be able to afford a 15 year home loan but at the same time, are in the need of a home, these options will seem to be very much beneficial.
As for the options available within the 40 year loans, you are left with either the adjustable mortgages or the fixed rate mortgages. By going for the latter option, you will be able to know exactly how much you would have to spend each month for the mortgage lender.
By Ella Mathews