In the last few years, the mortgage industry has seen an explosion of new loan programs. One is the 50-year mortgage. The question is whether you should use it to finance your new home.

25 years ago, there were limited financing options if you wanted to buy a property. You basically had the 30 and 15 year mortgage loan options. You also had to have good credit, low debt and a steady job history. Well, those days have gone the way of the horse and carriage. There are so many loan programs available now that you have to be in a pretty bad way not to get financing. While there are lots of programs, not all of them are worth applying to.

The 50-year mortgage is a new beast being offered in the mortgage loan market. Only a few lenders offer it and with good reason. I like to call these lifer loans. You are literally committing to paying a monthly payment for the rest of your life. Yes, the monthly payment will be less than with a normal 30 year loan, but it doesn’t really work out in the long run. Assuming you live to be 80 years old, you would have paid so much interest by the time the loan was paid off that you could have purchased five other homes!

The obvious answer to the long term of this loan is refinancing. Most people enter the loans with the idea that they will refinance after a few years. Yes, this can happen. On the other hand, you have to keep loan to value ratios in mind. It can be difficult to refinance if you have little equity in the property. With a 50 year loan, your payments over five years will generate little or no equity in the home. It might appreciate, but then again it might not.

At the end of the day, the 50 year mortgage programs popping up are generally not a great choice for most buyers. If anything, you should be trying to go with the shortest term possible to minimize your total interest payments over the life of the loan.