40 year mortgages?

Are 40 year mortgages a good thing or a bad thing? Does anyone know anything about them?

Re: 40 year mortgages?

you will be paying A LOT of interest on a 40-year mortgage. A LOT.
the plus side is your monthly payment will be a bit lower than a 30-year...

Re: 40 year mortgages?

These are basic calculations:

Let's say you get a home for $450K at 6.5%

For a 30 year mortgage your monthly payment will be $2,844.31 and over 30 years you will have actually paid $1,023,951.60 for your house.

For a 40 year mortgage your monthly payment will be $2,634.56 and over 40 years you will have actually paid $1,264,588.80 for your house.

The difference is $240,637.20 for an extra 10 years for only a $209.75 difference per month.

Hope that helps

Re: 40 year mortgages?

Another question-- what if you are planning on selling your house after 6 or 7 years? Or, if you want to refinance?

Re: 40 year mortgages?

I think it is worth it i fyou don't plan on staying long. Otherwise no way.

Re: 40 year mortgages?

Well since you are paying less per month, your principal will go down slower.

After 6 years (72 months), on a 30 year mortgage you will owe $414,891.19 on your house.

On a 40 year, you will owe $432,704.12 on your house.

This is a great amort website:
http://www.mortgagecontent.net/scApplication/fanniemae/monthlyPayment.do?p=Resources&s=Calculators&t=How+Much+Is+Your+Monthly+Payment