I'm a little on the chunky side and don't want to be. Is it healthy and possible to lose 40lbs by the end of March? I have already lost 10 through exercising three times a week and monitoring my calorie intake. I don't want to loss it too quickly if that means I will have saggy skin or increase my chances of gaining it all back.

You're setting a bit of a high goal for yourself but it's not impossible to do. You're just going to have to commit to this and really take charge.
First off you've got 15 weeks (give or take a few days) so you can lose between 30-45 pounds during this time. Chances are you'll be closer to the 30 than to the 45 but everybody is different.
You'll need to go on a low calorie diet, I would say around 1500-1800 calories a day with one "cheat" meal every week. The problem with low calorie diets is that they're very hard to stick to. If you allow yourself a cheat meal every week, it's a lot easier to maintain. Also as we're so close to the holidays, people tend to eat more and it's not fun being the only one not being able to partake of the bounty.
Then you hit the gym 5-6 days a week for an hour each day. Do cardio and if you want some light weights. Go for high reps and low weights for tone as you don't want to bulk up too much. The extra muscle helps to burn calories even when you're not working out.
If you stick to this, I'd say 35 pounds is doable and realistic.

I think it sounds healthy. And good job for you!! I like when people actually DO something healthy to change what they don't like instead of looking for a quick fix.

I lost 30lbs in 3 mths doing weight watchers(and have kept it off). If you loose more than 3 lbs a week it is likely that you won't keep it off. I swear by the points program, and was never hungry. Good luck girlfriend!!!

Congrats!! you sound like you know what to do, of course that's healthy!
keep up the good work