To get a secured loan it can take time for loan approval, as property will be inspected and appraised. Unsecured loans such as credit cards are usually faster to acquire, however loan approval time may include a credit check. A credit check involves a lender getting a copy of your credit report to inspect your credit history.

The loan approval process will differ for each type of loan. A quick loan will often have a higher interest rate, therefore it is often essential to compare loan rates and then decide which loan option is best for your situation.

Until recently, these loans were difficult to find. Fannie Mae has now announced they will begin purchasing these loans from lenders which should increase their availability.

Let’s look at numbers:

For a $250,000 loan with a fixed interest rate of 5.75% and a term of 30 years, monthly payments would be $1,458.93; but a borrower could save $83.40 a month by taking out a Fixed 40-year mortgage. Even at a higher interest rate of 6.00%, monthly payments would be just $1,375.53.

The monthly savings comes with an increase in overall interest:

If a borrower were to keep Fixed 40-Year Mortgage for entire term and make minimum monthly payments, they would pay approximately $135,000 more in interest.

40-Year Mortgages may be attractive to those borrowers uncomfortable with adjustable rate periods or who have difficulty qualifying under stricter guidelines of an interest-only loan, however, it is important to understand impact a 40-Year term will have on overall cost of your loan.

As always, it’s best to consult with your trusted loan professional. They can help you understand your options and determine which loan product is best for you.

Chris Rocks is a successful Mortgage Consultant and writer based out of Chicago, IL.

Website URL: http://www.loansbyrocks.com