Industry News

Wells Fargo rolling out 40-year fixed-rate mortgage

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Wells Fargo Home Mortgage said today it would join the growing club of lenders offering home buyers the option of a 40-year, fixed-rate mortgage. Wells Fargo is pitching the loan as a tool to bring down monthly payments in areas where home prices have soared, without resorting to an interest-only or option adjustable-rate mortgage, which it says are riskier. "A 40-year mortgage may be appealing to first-time home buyers, consumers in high-cost markets, real estate investors and buyers on fixed incomes," said Joe Rogers, executive vice president in Wells Fargo Home Mortgage's National Consumer Lending Sales division, in a press release. Wells Fargo says interest rates on a 40-year mortgage are expected to be about a quarter-point higher than rates on a traditional 30-year loan. Stretching the payments out an additional 10 years allows lower monthly payments. But more interest is paid out over the life of the loan, and equity builds more slowly. In a report last month, PMI Mortgage In...