Home Buying in 98052>Question Details

Faulkland, Home Buyer in Redmond, WA

do lenders offer 40 year mortgages? What is the rate currently?

Asked by Faulkland, Redmond, WA Thu Nov 11, 2010

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Hi Faulkland...

We have a program with Bank of America where they pay $1000 of your closing costs. As of yesterday, a 30-year fixed mortgage with them was 4.25%. And I agree with Chris below - the difference in monthly payments between 30 and 40 years is minimal. Good luck in your search!

Stephanie Clancy
The Cascade Team
Simply Outrageous Service! Not Outrageous Commissions!
1 vote Thank Flag Link Fri Nov 12, 2010
Faulkner, it is interesting to note that if you work to Greg White's numbers where the rate (5.25%) is more than a comparable 30 year loan your monthly payment would be about $1496.61. If you go with current 30 year rates of about 4.25% your payment would be about $1475.82. So, not only is the 40 year more costly over the life of the loan it is more costly every month. You probably don't want to go that route!
1 vote Thank Flag Link Thu Nov 11, 2010
I am a mortgage banker with Fairway Independent Mortgage Corp., located in Bellevue. While 40 year term mortgages used to be available, this is generally not the case today. In fact, the only 40 year loan I see in my list of available solutions is a Fannie Mae DU Refi Plus, with MI, and LTV > 80%, and is with only one investor.

I would quote this today at 5.25%, with a Loan Fee of $615.00 and an APR of 5.269%
1 vote Thank Flag Link Thu Nov 11, 2010
Faulkland, I haven't looked for a 40 year for anyone in a long time, but Greg is correct, they would be 5.25%, which really doesn't make any sense. What you might want to consider is a 30 year that is 10 year interest only, for a rate of 4.75%. You have the option of paying down principal any time during the first 10 years. At the end of the 10 years, your remaining balance will amortize over the next 20 years, and the rate will stay at 4.75%.
0 votes Thank Flag Link Thu Nov 11, 2010
Faulkland 40 year amorizations are available on conventional loans the rate is determined by the loan to value and your credit score.
0 votes Thank Flag Link Thu Nov 11, 2010
I'm a licensed lender as well as a Realtor. I checked on a couple of my sources and didn't find any 40 year terms currently offered. Some may still have it, but frankly when I had it available I never used it. The rates were higher than a 30 year fixed loan and didn't offer much in terms of monthly savings, but over the life of the loan were much more expensive. Depending on your goals, there may be other ways of accomplishing them which is more affordable.
0 votes Thank Flag Link Thu Nov 11, 2010
If you need a referral, feel free to contact me!
0 votes Thank Flag Link Thu Nov 11, 2010
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