For some, buying a home is like putting money in the bank, building equity in the home over time and paying something similar to a rent.

It's certainly smarter to buy a home than be a tenant. Yes, if the clich is true, buying a home is one of the smartest financial decisions most people will ever make.

Paying a rent is likened to the release of money down the drain, with nothing remaining over your head. Technically, you're helping to pay mortgage for whom you're renting a home from.

And due to the fact that housing prices have risen so much, many people have to find a mortgage payment that fits in their monthly budget.

Often a long-term loan such as a 40 year mortgage loan is the only answer that fits the bill.

Lenders are quietly pushing 40 year mortgage loans as a way to cope with the rise of interest rate.

As the name implies, this type of mortgage loan is stretched over a period of 40 years.

By stretching out the time that a homeowner has to pay the mortgage back, it reduces the monthly payment and that's what makes 40 year mortgage loans attractive.

Sure the benefit of such mortgage loan is lower monthly payments but it comes with a catch - that you are paying really so much interest during the life of the loan, and you're building so much less equity in the home over time.

The monthly payment on a mortgage of 40 years could be as much as $200 cheaper than a 30-year mortgage. However, in the end you are paying more money in interests.

It takes 40-year borrowers much longer to build up equity. Since very little of each payment you make builds equity, most of the payment amount covers interest on the loan.

Typically equity amounts are so small at first, that tiny fluctuations in housing prices can make the amount borrowers owe more than the value of their homes.

What about the time when you need to make home repairs? You might not have accumulated enough equity in your home to get another loan. How will you finance that home improvement is a good question, if you have a mortgage that stretches to 40 years.

Generally, a 40-year loan is suitable if you're a first-time home buyer who needs additional purchasing power. It allows you to afford the house of your dream or purchase more home for your money.

As time goes by, with an increased in your income, you can repay the loan or refinance it into shorter-term mortgages to reduce the interest costs.

On the other hand, older buyers will probably want to stay away. Most people don't want to be carrying mortgage debt into their 70s because they won't have the income to support the payments after retirement. 

Mortgage is not about interests or monthly payments. It is about building equity! In fact, more than a few people criticize these loans as mortgages inherited by borrower’s children.

Because 40 year mortgage loans come with their advantages and disadvantages, you should carefully consider your options before deciding whether one is right for you.