New 50 year Mortgage the Answer?

A handful of lenders have begun offering 50-year adjustable-rate loans to buyers who need to keep payments low in the face of record home prices and rising rates.
Most big banks already offer 40-year mortgages, which account for about 5 percent of all home loans, according to LoanPerformance, a real estate data firm.
So far, only a few small lenders have rolled out the five-decades-long mortgages.
"One of the biggest things in California is the high cost of homes," says Alex Diaz Jr. of Statewide Bancorp in Rancho Cucamonga, Calif. "And with rates going up, there's demand from customers (for) longer loans."
Statewide, which introduced its 50-year loan in March, has received about 220 applications, Diaz said.
For cash-squeezed buyers, the longer-term loans are another option. In California, only 14 percent of people could afford a median-priced home in December, when the median was $548,430, if they had to put down 20 percent, the California Association of Realtors found.
The 50-year mortgage also signals that the cooling real estate market is heating up competition among lenders.
"Mortgage lenders are getting craftier to get the attention of consumers," says Anthony Hsieh, CEO of LendingTree. But, he says, "the consumer needs to slow down and understand the product."
Two issues a homebuyer should keep in mind:
A borrower with a 50-year mortgage builds equity very slowly.
Because rates on the loans are adjustable, borrower's monthly payments could rise.
Still, the 50-year isn't considered as risky as an interest-only loan or a mortgage that lets borrowers pay even less than the interest.
With those loans, a borrower might not build any equity and could end up owing more than a home is worth -- called negative amortization.