Ariz.: Wells Fargo to Offer 40-Year Mortgage Loans...

Wells Fargo has joined Chase and a small number of other lenders in offering 40-year mortgages in Arizona, which has become a more expensive housing market for first-time buyers and others due to several years of high home appreciation.
Although the 40-year fixed-rate product offers lower monthly payments than 30-year loans, it does not allow borrowers to build equity as quickly as the shorter-term mortgage.
Wells Fargo says interest rates on 40-year mortgages will be about 0.25 percent higher than on 30-year mortgages and adds that the new product could dampen borrower interest in interest-only loans, which also lower costs for consumers--but only in the initial years. Forty-year mortgages have begun to catch on in expensive markets over the past year, and a few lenders have started offering 50-year mortgages in California.