Lower Monthly Mortgage Payments

The additional 10 years of amortization lowers your monthly mortgage significantly. Take for example a $500,000 loan at 1.25%. The monthly mortgage payment with a 30-Year Amortization is $1,666. The monthly mortgage payment with a 40-Year Amortization is only $1,324. That is a monthly savings of $342 and an annual savings of $4,104.

Easier To Qualify For The Loan

A 40-Year Amortization means your monthly payment is lower than a traditional loan with a 30-Year Amortization. A lower monthly payment means you have a better overall debt ratio (your debts relative to your income) and will have an easier time qualifying for a loan.  Typically lenders look for a debt ratio of 35-40%.

Qualify For A Bigger and Better Home

With property values soaring, the 40-Year Amortization has made homes more affordable for buyers. With a 40-Year Amortization a home will cost you less per month. Since lenders look at your debt ratio to qualify you for the maximum loan amount, a 40 Year Amortization will mean you will qualify for a more expensive home.