Getting on the
property ladder is a pressing concern for many people. As house prices continue to rise, the average length of loans appears to be going up, in America at least.
Mortgage and real-estate brokers, buoyed by rising levels of 30-year
fixed-rate mortgages, predict that
loan terms as long as 40-year,
fixed-rates could become the norm. The predictions, from the annual forecast of the California Association of Mortgage Brokers (CAMB), foresee the change occurring over the next few years.
The pressure is on for
first-time buyers to find monthly payments that are as affordable as possible. 40-year, fixed rate
mortgages are likely to be of particular interest to first-time
buyers keen to get into a home.
In America, the system is measured on
credit ratings; strong ratings could allow consumers to take the 40-year option at the same rate as the 30-year, fixed-rate option. The CAMB predictions also indicated that housing affordability problems would continue in the state of California, and first-time buyers would continue to struggle to receive
finance to
buy a home.
The possibility of 40-year, fixed-rate loans making houses more affordable for first-time buyers will surely lead to their increase in popularity. It remains to be seen whether a similar trend will occur in the UK.
