40 Year Mortgages are on the way, are they right for you? Some mortgage companies are now offering a 40 year mortgage. For the first time home buyers and move up buyers this could be just what you need to get into the house of your dreams. Some things to consider on your next home purchase.

1. Folks can remember when their parents told them not to sign that 20 year mortgage because they had a 10 or 15 year mortgage and that was long enough for anyone. Then along came the 25 year mortgage and then the 30 year mortgage. All came about because the increasing home prices and it allowed you to buy more home for your money. The same is happening with the 40 year mortgages.

2. During the past few years it has been the buy down rates that have helped families stretch to their new home and low down or no down loans. On close inspection I think you will find that these programs were not the best for everyone including the mortgage companies and banks.

3. Buying a home with a loan which has incremental increases in the interest rate may not seem to be a bad deal when the buyers qualify at the lower interest rate. But what about when the rates go up each year and they are totally unqualified three years later for the higher rate, who does it help. Not the home buyer. Check out the foreclosures in your area you may find that a good amount of them are homes sold in the last 5 years.

4. New home buyers consider this it may be best for you to stay within a real budget and not gamble on future pay raises, promotions or appreciation. We have seen and economists will tell us that in some sectors (a lot of job market sectors) real income has gone down and that effects your ability to pay your mortgage with the increases and every other thing including food.

5. The average home owner moves every 5 - 6 years. This next home purchase will in all likelihood not be your last. As your situation changes it will be time to move to the next bigger home in a nicer neighborhood and then again and again until it's time to stop or trade down. Take your time your first house won't be your last house unless you stretch to far away from a real livable budget and fall into foreclosure.

The new fixed rate mortgage of 40 years can be just what's needed to help families with the high cost of housing. This may help the hard working people who can not afford to live in the town in which they work.