That is because the traditional 25-year mortgage term is becoming a thing of the past as desperate buyers stretch their terms to 30 or even 35 years in a bid to make their repayments affordable.
Both first-time buyers and home movers are being forced to borrow larger sums to keep up with spiralling house prices.
While a longer mortgage term will save money at first, it can ultimately cost tens of thousands of pounds extra in total interest repayments.
Despite the dangers, the appetite for longer-term mortgages is soaring, according to new figures from the Mortgage Advice Bureau.
Some 21 per cent of homebuyers are now searching for mortgages lasting 30 years or longer, up from just eight per cent a year ago.
Brian Murphy, head of lending at Mortgage Advice Bureau, says: “Homebuyers are tearing up the rule book by searching for longer-term mortgages to secure cheaper monthly repayments.” He warns that extending your mortgage term will save you money at first but will ultimately cost you dear.
“The added interest that comes with repaying your debt over a longer period can add up to tens of thousands of pounds.”
Murphy says that stretching the repayment of the average mortgage of £151,668 over 30 years rather than 25 would cut payments by £83 a month but ultimately cost an extra £23,297 in total interest by the end of the loan.
Increasing the term to 35 years will cut initial repayments by £141 a month but cost an extra £47,707 over the lifetime of the mortgage.
red more: http://www.express.co.uk/finance/personalfinance/600127/When-your-mortgage-feels-like-life-sentence
To purchase a property, you may choose from a variety of lending choices. If you are a veteran, a VA loan is the best option for you to purchase a house. You may also use the funds to purchase land and construct a house on it. You may, however, contact Rae Drake for help with VA loans.
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