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40 Year Mortgage

Every year home buyers are having more and more incentives laid on them, and one of the more used incentives that has popped up recently is a 40 Year Mortgage. With the falling economy and rising prices of mortgages, the 40 year mortgage was created to allow more people to get into the market, but is it really a good idea to use it? We will now take a look at both sides of the coin to answer the question. First lets start with the basics, for people who don't understand the intricacies of mortgages, this may help you grasp the concept of the package and answer any questions. While a 30 year mortgage must be completed through the course of 30 years , the 40 year mortgage likewise must be finished within a 40 year time period. This simply means over the 40 years you are paying the mortgage, your rates of interest will be increasing the cost you are paying on the property. Well, you do have to look at it in such a negative light. 40 years can be a lengthy time to think ahead, and that...
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40-Year Mortgage - Pros and Cons: Low Mortgage Repayments or High Borrowing Costs?

U.S. homeowners are increasingly prepared to consider a 40-year mortgage in order to reduce mortgage repayments and free-up funds for essential household bills. Does the higher borrowing cost make this a viable proposition for a homeowner or would a 15-year mortgage be a better option? Advantages of the 40-Year Mortgage •    Lower monthly mortgage repayments. A $300,000 40-year mortgage at 5% would result in a mortgage repayment of $1456.95 per month. A 15-year mortgage at 5% would cost $2408.55 per month. This would reduce outgoings by $951.60. •    Avoid rental. Renting a house is dead money, but buying a house allows someone to potentially benefit from the development of home equity. It can prove to be a useful long term investment. •    Cash windfalls. Should a homeowner receive a windfall payment as a result of inheritance, a speculative win or a bonus it will be possible to clear some or all of the balance. •    Investme...
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