Close More Deals – AD Mortgage Offers 40-Year Non-QM Loans

AD Mortgage’s 40-year Non-QM loans mortgages may be exactly what the doctor ordered for ailing homebuyers with non-traditional incomes.  

There is a lot of talk in the mortgage industry about the prospects of 50-year mortgages proposed by the Trump administration recently. There is no clear-cut consensus by industry professionals about the positives and negatives of longer-term mortgages. To be fair, good arguments can be made on both sides of the issue as illustrated in this article by MPA. 

Nonetheless, high monthly payments for 30-year mortgages continue to be a problem for homebuyers whose incomes are keeping pace with property value increases over the last several years. Combine that with a massive adjustment in the way Americans are earning money, and it becomes both frustrating for potential borrowers and extremely challenging for mortgage professionals. 

Trying to Fit New, Round Pegs into Traditional Square Holes

Affordability pressure hasn’t eased – and today’s borrowers are feeling it. The national median mortgage payment reached $2,039 in October 2025, a level that continues to price out many otherwise qualified buyers. At the same time, the profile of the American worker has shifted dramatically:  

• 64 million Americans freelanced in 2023 
• 72.9 million independents are projected in 2025 
• Business applications remain historically high – 473,679 in August 2025 alone 

More homebuyers are seeking assistance from mortgage professionals with two key challenges: 

1. nontraditional income patterns 
2. borrowers who qualify on earnings but fail on monthly payment or DTI. 

This is where the 40-year mortgage becomes a strategic advantage and not just a niche option. It is an excellent tool for brokers in a market shaped by high rates, high costs, and income variability. 

Here is a list of borrow profiles and the challenges they are facing. A 40-year term could provide an excellent solution in these cases.

1. Lower Monthly Payment

With the median U.S. mortgage payment above $2,000, even strong earners are hitting affordability walls. Extending amortization reduces the monthly obligation enough to keep approvals alive and household budgets intact. 

Borrower Profiles

The Cash-Flow Tight Buyer
Dual-income households with stable jobs but heavy recurring expenses: childcare, auto loans, student debt, rising living costs. They should qualify, but the payment kills the deal unless the term changes. 

The Lifestyle-Oriented Buyer
Millennials and Gen Z who want financial flexibility, mobility, and the ability to save or invest, not become house-poor. Lower payments support their long-term strategy. 

The Multigenerational Supporter
Borrowers helping parents, adult children, or relatives abroad. A 40-year term gives them the room they need to manage household obligations without sacrificing the purchase.

2. Higher Purchase Power

Many borrowers today fail to achieve their homebuying dreams not because of income but because of payment-to-income pressure in high-cost markets. The 40-year loan expands what they can reasonably afford. 

Borrower Profiles

The High-Cost Market Buyer
Think CA, WA, NY/NJ, FL, CO – where median home values routinely reach $700k–$1.5M. Even well-paid earners fail traditional DTI. A longer term restores purchasing power without forcing location changes. 

The First-Time Buyer Shocked by Payments
Renters transitioning into ownership who can income-qualify but immediately hit a wall when they see their monthly payment – especially compared to rent. A lower payment eases the transition.

3. Irregular or Unstable Income

The “standard” borrower no longer looks like the old W-2 model. Freelancers, 1099 workers, independent contractors, and micro-business owners now represent a massive share of the U.S. economy, and this market is still growing. 

Entrepreneurship remains elevated, continuing the surge that began in 2020–2022. Irregular income patterns require stable, predictable housing payments – and lower monthly obligations support approvals.  

Borrower Profile

The Gig-Economy Earner
Creative professionals, rideshare drivers, consultants, online sellers, and tradespeople all experience income that fluctuates by season or contract cycle. Lower monthly payments help them absorb slow months without compromising homeownership.

4. Softening Payment Shock After ARM Resets

According to many estimates, millions of ARMs originated between 2020–2022 are approaching reset. For many homeowners, the jump from a pandemic-era rate to today’s environment creates a payment shock that can destabilize budgets. 

Refinancing into a 40-year term helps borrowers transition out of volatility and restore monthly stability. 

Borrower Profile

The ARM Escapee
These borrowers are not refinancing for savings. Instead, they are refinancing for survival. Lower monthly payments provide the breathing room they lose after an ARM reset. 

Importance to Partners

Today’s borrowers face three simultaneous pressures: 

1. High monthly payments (national median ≈ $2,039). 
2. High and rising cost of living. 
3. Unpredictable income patterns across tens of millions of workers. 

The 40-year mortgage is a solution that meets modern financial realities. It helps you: 

• Keep borderline approvals alive 
• Qualify buyers in markets where affordability is stretched 
• Serve the fastest-growing workforce segment in America (independent earners) 
• Offer strategic refinance solutions for borrowers hit by ARM resets 

The current market is defined by payment pressure, and brokers who understand where and when a 40-year mortgage fits will win more deals, support more borrowers, and do it sustainably. 

AD Mortgage is here to help you close more deals. Check out our wide range of Non-QM loan programs to find the solution that best suits your borrower’s needs.