If 30 years isn't long enough to pay back your home loan, you might want to consider 40 years.

Rising home prices have created new loan opportunities in Lake Havasu City as banks are starting to offer 40-year mortgages for qualified buyers.

Mohave State Bank Mortgage Manager Gary Ardesson said Fannie Mae came out with the loan option for this area in June and that his bank began offering them last month.

"So far we haven't had any," said Ardesson.

Lake Havasu City property values have been spiking higher over the last few years and the average price of a home in town is more than $250,000, according to figures from Realtor Carl Flusche.

Ed Jacobs, president of the Lake Havasu Realtor's Association, noted the trend came to the area from the California and Las Vegas markets.

"The market dollar isn't going as far as it used to," said Jacobs.

"Its aim is for people to have lower payments and get them into homes," said Ardesson.

The 40-year mortgage might only lower payments by $50 to $100, but Ardesson said that figure can be the difference between a prospective home buyer going for the deal or not.

"It's not a huge drop," said Ardesson.

Using $400,000 as the standard figure, Ardesson said a 40-year loan at a 6.25 percent interest rate would run the borrower $2,272 a month. The same loan for a 30-year period at 5.87 percent would run the borrower $2,369 a month.

"It comes down to the person's comfort level," said Ardesson, adding that good loan officers really find out what the customers wants and needs are before putting a loan together.

In Lake Havasu City, the Realtor's Association reported sales of $89,741,238 for the month of July, almost $4 million more than in June 2004.

"I think it's consistent with market trends," said Jacobs.

Despite this rise in sales, permits fell comparatively in July. The Community Development Department reported 66 single-family permits issued this year compared to 93 issued in July 2004.

Jacobs said those numbers may reflect the availability of lots within the city and the rising price of construction.

"It's easier for prospective buyers to go with the spec homes from the developers," said Jacobs.

Bud Schulz, executive director of the Colorado River Building Industry Association, noted the 40-year mortgage may help the building industry, but actual interest rates would be the key factor on the success of those loans.

Ardesson said the intent of the 40-year mortgage was to increase borrowers' purchasing power and help them qualify for larger loans with as little as only 5 percent down.

Larger loans would be needed with 213 active listings for homes valued at more than $400,000 in the Lake Havasu City area, according to the Realtor's Association.

Schulz noted just building a home costs almost four times as much as it did five years ago due to the rising costs of construction material.

This upward trend in building costs has affected CDD revenue. The CDD posted $186,222 in permitting fees in July compared to $215,971 in July 2004.

Despite this drop, Jacobs said he hasn't really seen where the market might have slowed. In fact, the Realtor's Association reported 88 single-family home land sales in July.

You may contact the reporter at ditullio@havasunews.com.