06:38 PM CDT on Tuesday, June 20, 2006

By OLGA CAMPOS / KVUE News

Imagine lower, affordable house payments spread out over... 600 months?

Fifty-year mortgages are starting to appeal to a growing number of first time homebuyers, but the financing trend has major drawbacks.

As home prices increase and interest rates creep higher, some first time homebuyers are tossing aside traditional 15 and 30-year mortgages and are instead stretching out payments over 40, even 50 years.

But Consumer Credit Counseling's Sally Borie warns there are pitfalls to signing a 50-year home loan.

"Are we gonna be around for that long? Even if we are, is the house that we're purchasing going to satisfy our needs for that period of time and that length of time? Because that's a long time," she said.

It's a long time, Borie points out, before you start to build equity with a 40 or 50-year mortgage, and that can mean trouble later.

"If they should have to sell in a market where prices are down and they don't have much equity, they may end up owing more than what they sell the home for," Borie said.

The 40 and 50-year mortgages started in California where sky high housing prices leave few options for homebuyers.

In Texas, another financing trend may soon force more homeowners into property foreclosure. Those who signed low adjustable rate mortgages (ARMs) are starting to see monthly payments jump.

Nationally, $300 billion worth of adjustable rate mortgages will re-adjust for the first time this year and a trillion dollars in ARMs will experience monthly jumps in 2007.

That leaves few options for some homeowners who want to stay put.

"If they're in an adjustable rate mortgage they probably need to look at financing into a fixed rate." Borie says the biggest mistake by consumers is waiting too long to ask for financial help.