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40 Year Mortgage

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					40 Year Mortgage: New Hope For Prospective Home Owners

Think that rising interest rates have priced you out of the home buying
market? Think again. There are some new mortgage options that make it
easier than ever to buy a home, namely, a 40-year mortgage.

Traditionally, when purchasing a home, most people take out a 30-year
mortgage. But recently, the federal government has introduced new loan
options that make it possible to extend the loan over an additional 10
years, making the total pay off period 40 years.

If that sounds like a huge amount of time, take a few moments to consider
the following facts:

A 40-year loan lets you get into a house now, not wait until your earning
potential increases.

Just because you take out a 40-year loan does not mean you have to stay
with a 40-year loan. You can easily refinance in a few years.

You may opt to sell the home in a few years. Getting into a home now
allows you to begin building wealth in home equity. When you sell your
home, you can take the profits and invest in your next home, with a
standard mortgage term loan.

What does a 40-year loan offer? Simply put, with a 40-year loan you can
afford to buy more home with less income. Using an average home price of
$200,000 and interest rates today, a 40-year mortgage means have almost
5% more home buying power with the standard income/debt ratio than they
would with a 30-year loan.

This mortgage option also gives buyers a little more flexibility. Many
buyers would have had to consider interest only loans or adjustable rate
mortgages. As the national interest rates increase, adjustable loans and
interest only loans can quickly catch unsuspecting buyers in a position
of being forced out of the home. Their monthly payment increases as
interest rates increase, increasing over their allotted budget.

If you are confident in your wage earning potential and the possibility
that it will increase over time, you may want to consider some of the
programs that are combined with the 40-year mortgage. This mortgage
option is available as a hybrid loan. Meaning you can combine the 40-year
loan with another loan program, like interest-only or adjustable-rate
loan.

Owning a home is a dream of many people. It not only makes sense because
it gives you an opportunity to stop paying rent to a landlord, but it
starts you on the path to investing your money in your home. Owning real
estate is the number one way that people save money and it is now
possible to save money even if your income is slightly lower than
traditional home buying rates.

Talk with a mortgage consultant to day and discuss your options. You may
be surprised at just how affordable it is to buy a home.