The mortgage industry has been very creative and diligent lately: a variety of mortgage loan products have been created to help real estate buyers to afford highly, if not overly, priced properties.

Two significant trends are longer term (i.e. greater than 30 years) mortgage loans and interest-only loans.

Both of the above mentioned mortgage programs help reduce the monthly payment so that people can afford properties they otherwise would not be able to buy, which arguably helps to keep the real estate boom continue.

Longer term loans such as 40 year fixed mortgages have been in existence since the 1980s but their popularity has only been on the rise since mortgage giant Fannie Mae started expanding its purchase of these loans.

A 40 year mortgage reduces a borrower's monthly paymment but increases the total interest payment over the entire life of the loan, when compared with a more traditional 30 year mortgage with the same interest rate.

On the other hand, interest-only loans require a borrower to pay only interest in the first few years on a fixed rate but the monthly payment could balloon after that should interest rate climb during those years.

There are ways to reduce the risk of rising interest rate on an interest-only loan. You can now get an interest-only loan whose rate is fixed for the first 10, 15, even 20 years. However, in those cases, a traditional 30 year mortgage might make more sense as long term rates have stayed at historical lows.

If you are on the market for a loan, to navigate through all these different types of loans, you would want to make sure that you understand the profiles of each of these mortgages and make the right decision that is based on your unique financial situation of now and in the future.

Whatever decision you make, the good news is, the mortgage industry is always there to innovate as long as you understand how their innovation meets your needs.