50-year Mortgage

With increasing home prices and mortgage rates and more competition for catching the attention of future homebuyers, lenders are desparately figuring out ways to keep the dream alive for millions of people who want to own their own home. Most banks already offer 40-year mortgages, which account for about 5% of all home loans. And now comes the 50-year mortgage. A handful number of lenders have begun offering 50-year adjustable-rate loans to buyers who need to keep payments low but wish to own a property.

If you wish to try this, you may note the following important points: A borrower with the 50-year mortgage builds equity very slowly. And because rates on the loans are adjustable, a borrower's monthly payments could rise in future and a risk on your affordability always remains.

It may work out good for you if your plan is to own the home for about 5 years, while the loan's interest rate remains fixed. For those who wish to make a longer term commitment to their residence, it would be better to give a hard look at your current and future financial state and then decide.

And even if your decision is 'yes', try to select a home that is below your affordability level. Do not stretch yourself too much to commit to a larger loan amount. Your luxury of today may turn out to be lots of pain for future years.