Extended Term Mortgages are HOTT!
Longer terms offer lower payments!
Extended Term Mortgages = (Flexibility)
Need lower monthly mortgage payments or think your income is not where it needs to be to qualify for that dream home? You are in luck; Lenders all across America have new expanded mortgage terms that are now more flexible today than ever. According to the President at Try Loan Online, in some states lenders are now allowing consumers to stretch their mortgage terms are far as 50 years. You are probably asking yourself this, who would want to push their mortgage out to a 50 year mortgage term? Well look at it this way, say you fell in love with a home and the price of the home was a little out of your price range. Did you know that by putting that same home on a 40 or 50 year mortgage could save you as much as $150.00 to $250.00 per year based on the sales price. So never say I can’t afford the payments in today’s mortgage industry. Lenders are quick to show you how you can with financing options that are more flexible than ever.
At Try Loan Online, we often recommend our clients to stretch their mortgages to 40 or 50 years versus doing an interest only mortgage. Here are some of the pitfalls to getting an Interest Only Mortgage versus a 40 or 50 year extended term mortgage.
Adjustments – When comparing a Interest Only Mortgage, your interest rate will eventually adjust, and in most cases higher, which could mean higher mortgage payments if interest rates continue to rise. In this market, your traditional 40 or 50 year mortgage would remain untouched by the market shift. This would enable your payments to remain consistent.
Market Conditions – If the market condition suddenly changed in your area, you could find yourself up side down and not have the ability to refinance out of the interest only mortgage. That would force you to sell your home to prevent higher future mortgage payments.
Now that you have read some of the pitfalls, I would like you to keep one thing in mind. Mortgage experts say, "The average American only live in their homes an average of seven years." Following that statistic it make more sense to have the lowest payment possible during that time frame? Better yet, you could quickly take the savings from the extended term mortgage and use it to pay down the mortgage balance or use it as a savings for your child’s education or for future home repairs.