The thought of anyone having a mortgage beyond the standard 30 year repayment time is anathema to some. Not long ago many mortgages were for 20 or 25 years with 30 year mortgages becoming popular only in the last generation. For someone in their mid30s, the thought of making their final payment at the ripe old age of 75 is down right scary, almost incomprehensible. While the term is long, this type of loan could work to your advantage. Read on and I will tell you why!
Lower Monthly Payments - Perhaps you don't have quite the income to be able to afford the payments on a 30 year mortgage, but you do for a home that has a 40 year mortgage. In that case, the extended loan term could put you into a home that you otherwise may not have been able to afford.
Finance Now, Move Later - If you know that you eventually will sell the home that you are in, then the mortgage term is inconsequential. What it does is to allow you to buy a home, build up some equity, and hopefully sell it for a profit five years or more down the road. You could have a 100 year loan and it wouldn't matter as you weren't planning to stay for the long term anyway.
Refinance Later, Shorten Your Term - Of course, you could always refinance your loan down the road. Even if you never move chances are you will have enough money to make larger payments and be able to shorten your loan and pay off your house in 30 years or less.
The idea of any mortgage should be this: to get you into a home. If the market you are moving into is sound, your income stable, and the promise of future prosperity remains with you, then buying a home with an extended term mortgage is a wise decision no matter what the pundits and prognosticators have to say about that.
In the short term, a long term mortgage can even help you when it comes to taxes as the more significant portion of your mortgage payment will be interest payments, something most states and the federal government takes into consideration when you do your annual taxes. Work it to your advantage and a new home with a lower tax burden can do you wonders even if the term is for 40 years!