Is a long-term mortgage really the best thing for consumers? Elan Weintraub doesn’t think so.
“Historically, seven- and 10-year terms have higher interest rates, and for many people their income goes up over time, so it’s better to have a lower rate and lower payment without tying yourself up,” said the broker and director of Mortgage Outlet. “What I recommend to my clients is taking a five-year term and increasing their payments as if the interest rate was the same as on a 10-year term. If the five-year rate is 3.95% and the 10-year rate is 4.95%, that money goes directly to their principal.”