Real Estate and Home Mortgages - First Time Buyer - 30 vs 40 yr loan?

Hey all, first time poster and buyer here :)

Anyways, I was hoping to get some input from you pros out there regarding 30 vs 40yr loans. I understand that more interest will be paid for the 40 year loan, but do you think the lower monthly payments would be worth it? What about in regards to selling the property later on, say 5-10+yrs later, how would a 40 year loan affect that? Any input on this would be greatly appreciated! Thanks

Well, on a 30 year loan you pay mostly interest for a looooooong time; a 40 year loan would be even worse. On a 40 year loan in 5-10 years you'll have made very little progress on the principle. As long as the property appreciates you're okay, but if the real estate market stagnates you could make little or nothing on the sale after expenses.

The difference in payments on a 30 vs a 40 is negligible... and the difference of $$ going towards principle is staggering... Avoid the 40 if at all possible.

40 not bad, just make sure you are putting 20%+ down...AND add extra principle when you can........higher rate, more interest over time too..........try to make the 30 work for best results.....as a firsttimer, it will all depend on your salary for what specialized programs are offered...if it is below the local limit...try the wells fargo CDMP loan.....100% no MI, conventional 1/2 % below market (current rate would be around 5.25%) with just 1% orig and $385 processing..great loan, but have to be at 80% HUD median income......worth call (I do work for WFHM)............good luck

robby, thanks for the advice. We are leaning toward the 30 yr loan. We live in Los Angeles and annual income is around $150K, so I don't think we fall within that 80% mark. Are you familiar with the Wamu Mortgage Plus? It seems to offer many of the things you mentioned in the CDMP, without the income limit. We will be speaking to Wamu pretty soon about getting pre-qualified/approved.

excellent....you never know about LA...worth a call to Wells to see what the limits are...there are also census tract exclusions for income as well...can't hurt to see... BofA has the Acorn....most of the big lenders have niche programs like that. good luck...stay with a big name for this purchase..and you won't get taken advantage of......brokers add all of their overhead fees to any first time program........

If you haven't thought about it. Credit Unions if you are eligible, they sometimes have better rates.

BTW anyone hear anything about BoA buying countrywide? I know many CW offices have closed in this area...well, there aren't "many" here. lol

BOA has made a tender offer for CFC (Countrywide)... and is awaiting regulatory confirmation/approval. Means little to customers of CFC - their financial agreements won't change - simply who their payments end up in the coffers of....

bought it for a song too.....4.1 billion........BofA gonna have an ugly balance sheet for a couple years, give the stagecoach a chance to bury em all!...........credit union have zero flex...A+++ all the way...........who locked in the 30 at 5.125 with a point on Wed morning?????? Ground zero for rates in the past 40 years...........