40 Year Mortgage
I didn't even know you could get these -- apparently, you can actually get a 40 year mortgage! As of March 17, Freddie Mac's Weekly Mortgage Survey of market rates put the average fixed-rate for 30-year conforming loans at 6.34 percent. Forty-year loans typically cost at least 0.25 percent more than 30-year loans -- on the conservative side -- putting the 40-year rate at about 6.590.
Well, if they cost you more, what's the attraction? Lower monthly payment is one of the biggest benefits, especially for people who couldn't otherwise afford a home. No surprise: the loans are popular in California where property prices are really hot.
In California a new 40-year mortgage program is helping make the loan's long term costs more manageable, at least for first-time home buyers who can qualify. The California Housing Finance Agency (CalHFA) which serves only low- and moderate-income, first-time home buyers who meet income and home price limits is offering a 40-year loan with a fixed rate of 5.75 percent. That's a pretty attractive rate!
That rate is so good, it almost makes you want to be in the low income housing market...