Are 40-year mortgages a good idea?
By increasing the standard loan term from 30 to 40 years, you reduce the amount of your monthly payment and the amount that is being applied to the principal balance of your loan. This may not be the perfect scenario, but a 40-year mortgage may be ideal for borrowers who face affordability issues and think homeownership is beyond their reach. First-time homebuyers, people living in high-cost areas or seeking manageable monthly payments may find this amortization term attractive. If a 40-year mortgage is necessary to obtain home ownership, this may be a better alternative in the long term than not purchasing a home at all.
