40-Year Fixed-Rate Mortgage

Mortgage Products

Fixed

ARM

Reverse

By increasing the standard loan term from 30 to 40 years, monthly payments are lower, thus making them more affordable, and increasing borrowers' purchasing power. This mortgage is ideal for borrowers who face affordability issues and think homeownership is beyond their reach. First-time homebuyers, or those living in high-cost areas seeking manageable monthly payments may find this amortization term attractive. The 40-year Mortgage is eligible on both standard fixed-rate products as well as our standard 3/1, 5/1, 7/1, and 10/1 hybrid ARMs.

Consumer Benefits

With a longer amortization period, borrowers obtain lower mortgage payments
Easier to qualify for a mortgage as well as a larger loan amount

The Target Audience for the 40-year Mortgage

The 40-year Mortgage is ideal for borrowers who face affordability issues and think homeownership is beyond their reach. First-time homebuyers, or those living in high-cost areas seeking manageable monthly payments may find this amortization term attractive. In addition, the fixed-rate option may appeal to financially conservative borrowers who prefer lower monthly payments along with the stability of a fixed-rate, fully amortizing mortgage.

For borrowers who:	The 40-year Mortgage delivers:
Desire lower monthly payments	By amortizing the mortgage over 40 years rather than the standard 30-year term, monthly payments are lower.
Want to live in areas where housing is expensive	A 40-year term helps address affordability concerns and may make it easier to qualify for a mortgage.
Wish to increase their purchasing power	The lower payments of the 40-year term can help borrowers qualify for a larger loan amount than the 30-year fixed-rate would allow.
Have other financial obligations that bear higher interest rates, or would like to optimize an investment strategy	This mortgage offers borrowers a way to use their mortgage as part of an overall financial management strategy. The borrower can utilize monthly payment savings to pay off higher-cost debt, or invest the savings elsewhere.

Product Options

2006 Conforming Loan Limits

Number of
Units Maximum original
principal balance Alaska, Guam, Hawaii,
and U.S. Virgin Islands only

1 $417,000 $625,500

2 $533,850 $800,775

3 $645,300 $967,950

4 $801,950 $1,202,925

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