Whitelaw and Sons Real Estate Morgan Hill
reaching your real estate goals
Robert Whitelaw, Realtor®

Robert Whitelaw, Realtor®

Published:Apr 20, 2023

Born and raised in Silicon Valley, Robert has helped clients successfully buy, sell and invest in real estate throughout Santa Clara County. Robert uses his local market knowledge to help clients across Silicon Valley!

It is always surprising when bad ideas get so embraced – until you figure out who benefits the most. A 40 year mortgage is like that.

When you consider that a 40 year mortgage really just takes all the bad things about a 30 year mortgage and makes them worse, it is hard to understand why anyone would want to do that to someone is already in financial difficulty. However, the good folks over at the FHA seem to think it is a grand idea!

Follow The Money

As tends to be true in most cases, when you figure out who benefits most from the idea of a 40 year mortgage the more clear it becomes as to why some are so happy about the idea.

Create Buyers

A policy like this will only fuel buyers to consider that when buying a home. If they know that have that as an out, they may be more willing to take a financial risk initially and then plan to later try and move over to a 40 year mortgage.

Raise Prices

Another effect of this policy – particularly if it is just a first step toward making the 40 year mortgage open to all borrowers – would be an increase in prices. If you increase what borrowers can initially afford, they will inevitably be willing to bid higher. This always pushes up prices.

Insane Costs

Finally, the math of a 40 year mortgage just does not make any kind of sense. You end up paying for your home more than twice. At the same time, the amount you save monthly is minor by comparison to the cost.


Prefer The Video Version?

Check Out The Last Show!


NAR Settlement – For Buyers and Sellers

The NAR settlement, once it is approved, is set to go into effect in the middle of July 2024. This will completely change how Buyers agent are compensated and we can count on chaos while the systems adjust to the new reality.

Get Your FREE Home Value Estimate!

Just enter your address and get access to your instant home value estimate, but also amazing tools to evaluate refinance options, your equity, ways to levarage your homes equity, how to pay your home off faster… and so much more!

Schedule A Consultation With Robert!


Let's Talk About Achieving Your Real Estate Goals!

Subscribe To Our Newsletter

Subscribe To Our Newsletter

Join to get access to the best information on our local real estate markets, important real estate news, insights, information and tips on how to realize your real estate goals!

You have Successfully Subscribed!

Pin It on Pinterest

Feel Like Sharing?

Share this with your friends and followers on social media!