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A 25 year mortgage loan is often considered a unique mortgage product.Similar to the 20 year mortgage, the loan is available but lenders seem to find it harder to get investors to buy 25 yr termed mortgage products. It is much easier to bundle 15 and 30 year loans in billion dollar packages and sell them. It takes so long to bundle 25 year mortgages that it become expensive for the originator of the loan to hold and service the loan. Interesting Note - Many lenders use their own capital to fund mortgages. After they fund the loan they are intending to bundle many loans together and sell it to investors. Since it is rare to write 25 and 20 year mortgages it may take the lender longer to gather enough to make it profitable to sell. There for, they end up having to service the loan and capital that could be regained and lent again is being held up until the loans can be sold. Most borrowers feel that a shorter termed loan offers a lower mortgage rate and therefore it is the better product to get. But this is usually not true for the 25 year termed mortgage.The rates for the 25 year mortgage are close, if not the same, as the 30 year fixed rate loan. This is because the product is rarely used and is a hard sell on the secondary market. Since so few 25 year termed loans are originated and it takes so long to package up bundles of 25 year amortized loans to sell there tends to be a premium charge for offering this unique home loan product. The premium charged comes in the interest rate. This means that although the loan will be paid off earlier, than the 30 year, It usually has a similar rate or may even be slightly higher than the 30 year mortgage. Most of the time loan officers advise against a borrower getting a 25 year mortgage.It offers no real substantial savings and is usually only recommended by financial planners/accountants that have created a specific financial plan for a 25 year plan for the borrower. But if you want it, It is offered in the fixed rate and most lenders will only give it in the conventional loan type. Utilizing this web site is agreement to our privacy policy. This is not an advertisement for credit as defined by paragraph 226.24 of regulation Z. There is no Mortgage rate guarantee for all applicants . information is not intended to be used as investment advice. Please contact a competent and well qualified loan officer by submitting an Bad Credit mortgage quote request online in order to get up to date and pertinent bad credit mortgage information.
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