Is 50 Years Too Long for a Mortgage? - KFVS12 News & Weather Cape Girardeau, Carbondale, Poplar Bluff

Is 50 Years Too Long for a Mortgage?

Is 50 Years Too Long for a Mortgage?
By: CJ Cassidy

Gas prices show no signs of coming down, and many of us have wondered how to stretch an already tight budget.Now some mortgage lenders believe they might offer relief to home buyers in the way of fifty year loans.

So far, only one lender in California is offering those loans.

Around the Heartland, we found some lenders who will go as high as forty years.But, is going over the typical thirty year mortgage a good idea?

We went to some brokers to find out.

"I want a fifty year mortgage when I'm 70 if I qualify," Realtor Aaron Abernathy says.

Joking aside, realtors say the new fifty year mortgage loan offers prospective home buyers a new "lease on life."

"It would allow buyers who normally couldn't afford the four bedroom to be able to afford the four bedroom, because of longer terms and lower payments," Abernathy explains.

But be careful, because here's how it would work:

Your monthly payment on a $100,000 home at a 6.6% fixed interest rate over 30 years would come to $650.00 a month.

That payment would go down by about $70.00, if you stretched it out over fifty years.

However, in the end, you'd be shelling out more than $116,000 in finance charges over the extra twenty years, and that's for someone with great credit.

Mortgage lenders say there are also other factors to consider when you think about buying a home.

"Your credit score, how much you're needing to borrow: if it's 100% financing versus if you have a 20% down payment. All that makes a difference as what your interest rate would be," Dawn Dauervice President of The Bank of Missouri says.

She adds that most people in the Heartland prefer to stay with thirty year loans.

"I think because our loan amounts and sales prices of homes are not comparatively high, as they are in California," she says.

But realtors point out there's always room for change.

"We saw it in the auto industry with four, five and six year terms designed to make vehicles affordable. I think you will see the same in this industry," Abernathy says.

To figure out what plan is best for you, simply talk with a lender to sort out the pros and cons.

So far, it looks like Statewide Bancorp out of California is the only lender to offer the fifty year mortgages.

It isn't licensed to offer those loans in any of our Heartland states.

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