No mortgage is a good idea, but if you are going to have one a 40 year loan is as good as any, assuming the rate isnâ€™t much higher than a 30 year and there isnâ€™t a prepayment penalty. But we canâ€™t tell you if it is right/wrong for you, only you know your long term objectives and reasons for wanting a 40 year loan. I would assume you are trying to qualify for a mortgage and taking a longer term lowers your debt/income ratios. If that is the sole motivation for your question then you are not trying to decide if this is a good business move, only trying to justify what you want to do.
I have only had a couple clients in my career to actually use a mortgage as a good business move, they had the opportunity to arbitrage a low interest rate. Most of my clients use a mortgage out of necessity, not as a long term strategy.
Come on guys, until just a few years ago the average length of time that a mortgage stayed on the books was about 36 months. So knocking one type of mortgage vs another is silly, they are all debt that hardly ever gets retired. I donâ€™t think I have ever had a client retire a mortgage, refi - yes, sell and pay off - yes, but never paid off by making regular payments.
My advice is not to think of it in terms of years, but as debt. So how soon do you want to be debt free?
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Financing Kentucky One Home at a Time