40 Year Mortage Loans?
Mortgage Loans – The timeline is growing – 40 and 50 year loans are here
By Nan Wood
Loans in the real estate arena are extending. While this has become the norm in the auto industry, the trend is beginning in the real estate financing and refinancing arena. The reason is the higher costs of purchasing homes. The real estate boom has provided double-digit appreciation to homeowners.
Since a larger down payment would be an answer to making the mortgage affordable, many families are not in a position to make a large enough deposit. Young families don’t have the income to save enough. They are working hard to pay the bills they currently have.
Traditionally car loans ran for a period of three or four years. Today there are loans in the five, six and seven year range. So it is not surprising the mortgage loan programs are now extending their payment periods. Longer time periods allow for smaller mortgage payments when incomes are lower.
In California, lenders are introducing fifty-year terms. Since California’s real estate is among the highest priced in the country, lenders are proactively looking for ways to make mortgages more affordable. This will open up the market to more younger families. A typical mortgage payment in California is two or three times the average rent. Each family must decide if the risk is worth taking when they take on one of these long term loans.
Since more interest in paid on the longer term mortgages, higher tax deductions are possible. Investigate the options and possibilities. Contact professionals and ask their opinion, do your due diligence before making a decision.
Nan is an Accountant with an online presence
MortgageLoans This site provides you with resources to do your research.
By Nan Wood
Loans in the real estate arena are extending. While this has become the norm in the auto industry, the trend is beginning in the real estate financing and refinancing arena. The reason is the higher costs of purchasing homes. The real estate boom has provided double-digit appreciation to homeowners.
Since a larger down payment would be an answer to making the mortgage affordable, many families are not in a position to make a large enough deposit. Young families don’t have the income to save enough. They are working hard to pay the bills they currently have.
Traditionally car loans ran for a period of three or four years. Today there are loans in the five, six and seven year range. So it is not surprising the mortgage loan programs are now extending their payment periods. Longer time periods allow for smaller mortgage payments when incomes are lower.
In California, lenders are introducing fifty-year terms. Since California’s real estate is among the highest priced in the country, lenders are proactively looking for ways to make mortgages more affordable. This will open up the market to more younger families. A typical mortgage payment in California is two or three times the average rent. Each family must decide if the risk is worth taking when they take on one of these long term loans.
Since more interest in paid on the longer term mortgages, higher tax deductions are possible. Investigate the options and possibilities. Contact professionals and ask their opinion, do your due diligence before making a decision.
Nan is an Accountant with an online presence
MortgageLoans This site provides you with resources to do your research.
posted by Nan at 1:20 PM
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