Every one of us dreams of owning their own homes at some point in time regardless of level of income or interest rates payable for loans and mortgages. The cost of buying or constructing houses is huge and this makes doing so unattractive to the common citizen. Mortgages on the other hand allows people to own houses and pay for them over long periods of time by dividing the principle sum and distributing it over several years. Usually the years applied on the mortgage add up to a maximum of thirty years but current times have created a need to add on this time in order to make mortgage affordable to many and reduce foreclosures.

Lenders are concerned that the increase in home prices followed by increasing interest rates will make houses unaffordable to many and lead some of those servicing their mortgages to default. This is not good for business since reduction in demand for houses will lead to reduced businesses for real estate companies and to lenders who finance purchase of homes through mortgages. They have therefore found it prudent to create a fifty year mortgage plan which is already operational in some states. These have the desired effect of keeping installments low and sustaining the demand for housing especially in these financially difficult times (CNNMoney, 2010). The lengthy repayment periods means increased earnings for lenders as demand grows for longer loans and home owners keep paying interest on their mortgages over long periods of time.

Consumers on the other hand need to be wary of the product since most of these lengthy mortgages have adjustable interest rates. This means that interest rate might change over the years increasing the amount of installments borrowers have to pay. This means that the overall sum of money which will be paid for the house will be much higher that on small mortgage programs. This means that consumers who can afford to take mortgages spread over less time should do so and avoid 50/60 year mortgages.

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