Newrez, a Non-QM lender based in Fort Washington, Pa., is the newest entrant into the 40-year mortgage market.
Similar to others that are available, the one from Newrez includes a fixed-rate and interest-only payments for the first 10 years before the loan turns into 30-year, fixed-rate mortgage with monthly interest and principal payments.
“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,” Newrez spokesperson Mackenzie Coopman said.
The rate for an average 30-year fixed mortgage is just over 6%, Bankrate reported Tuesday, up from 4.87% four months ago, making homes less affordable for many homebuyers.
The 40-year, interest-only option applies to what Newrez describes as “Smart Series Non-QM products” and is now available across all of the company’s lending channels (Retail, Wholesale, Correspondent, Joint Venture, and Direct to Consumer).
“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,” Jeff Gravelle, Co-head of Production at Newrez, said. “Our Smart Series products, like the 40-year mortgage, are developed to meet the needs of today’s borrowers and open the door to thousands of prospective homeowners.”
Other Non-QM lenders offering a 40-year mortgage include Atlanta-based Angel Oak, and Rockville, Md.-based ACC Mortgage. Another Non-QM lender, East Meadow, N.Y.-based Sprout Mortgage, offered a 40-year mortgage before closing its doors.
