"There's a couple of drawbacks in my opinion," Alley said. "The interest rates that you are going to pay for that program are typically higher than just your straight 30-year mortgage. So you're paying a slight premium right now for that 40-year mortgage. I've seen it as high as 3/8 to 1/2 percent above a straight 30-year fixed. That takes away some of those benefits of extending the term of the loan."

However, even at a higher interest rate, the 40-year mortgage lowers a homebuyer's monthly payment.

For example, a $200,000 fixed-rate mortgage at 5.75 percent costs $1,167 a month on a 30-year payoff schedule. The monthly principal and interest payments on that same loan drop to $1,135 on a 40-year schedule carrying a fixed interest rate of 6.25 percent, according to Bankrate.com. However, a borrower will pay roughly $14,000 more in interest on the 40-year mortgage after 10 years compared to a 30-year mortgage.

Debbie Goldstein, executive vice president for the Center for Responsible Lending in North Carolina, said 40-year fixed mortgages can be useful in improving affordability by reducing monthly payments and helping qualify people for buying a home.

"The concern with them that borrowers should be aware of is that they build equity much slower and pay off the balance much more slowly," Goldstein said. "The primary concern would be coupling a 40-year mortgage with other layers of risk. For example, coupling a 40-year mortgage with some kind of interest-only or option payment ARM where you are also taking on the risk of interest rate fluctuation and building equity at a slower rate. That would be much more risky to the borrower and could put them at risk of not being able to afford the loan."

Yet Goldstein acknowledges that for some people, like Earnest, who have the discipline to invest the savings, the 40-year option ARM makes sense.

In October 2003, Fannie Mae, which operates under a congressional charter and buys mortgages, began a pilot program in which it started purchasing 40-year mortgages from credit unions.

By June 2005, Fannie Mae began purchasing the product from all of its seller servicers, according to Betsy Hildebrandt, a spokeswoman for Fannie Mae.

"Depending on the borrower, the 40-year mortgage might make sense for a first-time homebuyer who is trying to keep their payments down," Hildebrandt said. "It's not for every borrower, and like any other mortgage product it has advantages and disadvantages.

"For some borrowers the longer amortization period could make the difference between owning a home versus not owning a home."

Daniel Mauer, owner of Madison Mortgage in Heber City, cautions people against longer-term mortgages and option ARMs.

"Isn't the mortgage really designed to favor the bank?" Mauer asked. "Everybody wants to become an earner of interest and not a payer of interest. You can't delay the inevitable forever. Eventually you're going to have to pay off your house.

"All the people I know that own their house free and clear, they're much further ahead financially than the people I know that are trying to use their equity in investments."

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E-mail: danderton@desnews.com