The FHA adds 40-year mortgages

If homeowners have difficultly making their monthly mortgage payments, the Federal Housing Administration has approved a 40 year mortgage designed to achieve a minimum 25% reduction in principal and interest payments. However, this will cause more interest in the long run. The FHA says this will protect borrowers from default because they will have a lower monthly payment.
This move will help homeowners retain their homes after defaulting on their mortgage by allowing the mortgage to be extended up to extra ten years. This would effectively lower the monthly payments.
Bankrate.com reported that on a $312,000 mortgage at 6.85 percent interest, the monthly payment for 40 years was about $100 less than the 30-year loan but the interest would be almost $170,000 more.
If 40-year mortgages become instituted for home buyers, and the government backs them the way they do with 30-year mortgages, you will see house price increases. You must understand that people are shopping for homes based on their monthly payment. A 40-year mortgage will drive up how much money they are offering. In the end, you will see people paying the same monthly mortgage payment over 40 years as they would over 30 years. This will be great for home sellers but terrible for home buyers. To summarize, a 40-year mortgage will result in more buyers and higher prices. I understand that people think this will help low income people purchase houses, it is only going to drive up home prices and make it more unaffordable for everyone, especially the most vulnerable people in society.