Federal Housing Administration Approves 40-Year Mortgages
April 7, 2023 | Anthony Cosenza
As both the government and buyers scramble for options in the current housing market, the Federal Housing Administration approves 40-year mortgages as an option for homebuying entry.
When barriers to home buying occur, the government and associated real estate industry professionals work to find options for those looking to enter the market. The Federal Housing Administration approves 40-year mortgages now, bringing more options to buyers.
FHA loan options have long been a reliable option for homebuyers, though a Private Mortgage Insurance premium usually gets tacked on to monthly payments towards the loan. Prior to the FHA approving 40-year mortgages, HUD announced a March plan to cut PMI payments going forward.
While this adds avenues for folks to get into the purchase market, it also can bring confusion. Chatter has been rising about the “3-2-1 buydown”, and how it’s important for you to not confuse it for “the new option ARM“.
The 40-year mortgage plan helps spread out the payment to lessen the monthly costs. The will has been there for buyers, but the way has’t quite been there.
And, while this may sound like music to your ears, if you’re a potential homebuyer, you’re both right and wrong. While the monthly payment can get spread out, one is paying more overall money in interest, making it a bit of a short-term win for you, but a long-term concern.
So, as a buyer it again becomes critical for you to consult with a real estate professional, as well as a mortgage professional. We at Casa Bella Realty Group are happy to meet with you and can also refer you in the direction of some great mortgage industry stars to help walk you through all options.
Again, as you embark on your homebuying journey, one of the initial steps is to get pre-approved for a home loan. This not only earmarks you as a serious buyer to a seller, but also allows you to pounce even more quickly on a house that you covet.