50 Year Mortgage Now Available

March 2, 2007

Last year, the 40-year fixed-rate mortgage became increasingly popular with borrowers — primarily marginally qualified home buyers. Predictably, the 50-year mortgage is being offered by lenders and brokers this year. It’s very close to being an interest-only mortgage, but the balance is amortized very slowly particularly in the early years of the term. It helps people qualify for needed financing in the purchase of a much-desired home, and the lower monthly payments make it possible to buy a more expensive home than would otherwise be possible in some cases.

The downside is the extra cost the borrower will pay in interest. That extra interest cost is seen in every payment due to the long repayment period. Also, in many cases these mortgages carry a higher interest rate as compared with a conventional 30-year loan – sometimes a quarter to a half a percentage point higher. If this type of mortgage interests you, email me or give me a call and we will get you in contact with a mortgage lender or broker, so you can compare it with other options.

Posted in All Things San Diego, Lending, Real Estate, Taxes, Things of Interest