Finance & Loans

40 year mortgage rates

40 year mortgage rates are a great option if you are worried about your cash flow. By getting a 40 year mortgage, you can spread out the payments you have to make and still own a nice home. But one of the problems with this loan is the high interest rate that is associated with it. This is unavoidable because the long time period represents a huge risk for the lender. Therefore they charge high interest rates in order to recover as much money as possible from you.

Getting this type of loan is not really easy. You have to have your credit history in good order and hope that the lender does not find any discrepancies. Perhaps a better approach would be to prequalify for a home loan. This will enable you to find out where you stand with lenders before you start dreaming of buying a new house. Prequalifying is also beneficial when you go to realtors, because they then know that you have the means to buy a house; at that point they get a lot more attentive to your needs.

If you have a 40 year mortgage hanging over your head and your financial situation improves (promotion, inheritance, etc.) consider home mortgage refinancing. This will bring down the term of payment and give you a better interest rate as well.It will also give you a better credit history, which could be useful if you need to take out another loan or get a good credit card.