40 Year Mortgage Impact On Northern Michigan Housing

Do you qualify for a 40 year mortgage? The Federal Housing Administration announced on Monday that it is adding a new 40 year mortgage to assist borrowers who are behind on their mortgage payments due to Covid-19 forbearance. This modification is designed to help borrowers reduce principal and interest payments by about 25% from their 30-year mortgage payment plan if they’re struggling to begin making their payments again according to the FHA. Philadelphia Federal Reserve Bank president Patrick Harker has been pointing to 40 year mortgages as being a useful tool in helping struggling homeowners to get back on track and that the 40 year mortgage modification program could serve as a testing ground for the product’s popularity overall. “With mortgage rates on a currently high rising trajectory it can be presumed that it may slow down the current housing market. Now if mortgage rates were to stabilize and eventually start going back down, along with a new 40 year mortgage we could see a continued boom in housing for the foreseeable future. This would once again allow people to highly leverage their equity to maximize their home approval amount. The short term benefits would be huge but you would have to weigh that with the fact that you are paying a mortgage for 40 years of your life.” Says Amber Cyman, Traverse City Realtor. Amber is the #1 most followed Michigan Realtor on Facebook. Make sure to keep her in mind if you need a Northern Michigan Real Estate Agent.

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