For most adults in Tennessee, a home is typically one of their largest assets. Whether you’re a single homeowner or married, you may relate to those who have encountered financial challenges in recent years. If a financial problem escalates, making ends meet can be difficult, especially regarding mortgage payments. If you’re not a homeowner yet but are in the market, you might want to learn more about a 40-year mortgage, which could possibly help some people avoid foreclosure.
A 40-year mortgage can help keep finances in check
When you extend the life of a mortgage loan, it typically enables you to have a lower monthly payment. On a 15-year or 30-year mortgage, your payments would no doubt be a lot higher each month than they would if you extended your total loan period another 10 years. That decade makes a significant difference to your monthly payment amount.
Potential downsides of a 40-year mortgage
The biggest potential downside to signing a 40-year mortgage plan has to do with interest payments. Yes, the longer life of your loan enables you to have lower monthly payments. However, because you will possibly be paying off your mortgage for another decade than you would if you had a 15-year or 30-year mortgage, this means you’ll be paying more interest.
Concerned about possible foreclosure
Any number of issues, including income, your family’s financial needs and how much overall debt you’re carrying, can spark a serious financial crisis that is difficult to overcome. If you’re worried about being able to avoid foreclosure, it’s helpful to research Tennessee bankruptcy laws, because a bankruptcy petition typically activates an automatic stay against foreclosure and most debt collection actions.