Now, Newrez is joining them in offering 40-year mortgage mortgages.
The program offered by Newrez is a bit different. It includes a fixed-rate and interest-only payments for the first 10 years before the loan turns into a 30-year, fixed-rate mortgage with monthly interest and principal payments.
Newrez spokesperson Mackenzie Coopman told the media:
This program is developed for borrowers and investors that have been priced out of today’s housing market. The option allows borrowers to have more affordable monthly payments by offering a longer loan term.
The rate for an average 30-year fixed mortgage is just over 6% as of today. Unfortunately, this is up from 4.87% four months ago. As a result, this makes home ownership less affordable for many homebuyers.
The 40-year, interest-only option applies to what Newrez describes as “Smart Series Non-QM products.”
It is now available across all of the company’s lending channels. This includes their retail and wholesale units. It is also included with their correspondent and joint venture partners.
Jeff Gravelle, Co-head of Production at Newrez also told the media:
We are continually enhancing and updating our Smart Series products to ensure we are providing competitive Non-QM financing options for our clients in current market conditions. Our Smart Series products are developed to meet the needs of today’s borrowers and open the door to thousands of prospective homeowners.
Other lenders have been offering a 40-year mortgages for a while in order to keep originations flowing in. They include Angel Oak and ACC Mortgage. Sprout Mortgage offered a 40-year mortgage before closing its doors in July.