The Best of Both Worlds
Today homebuyers are in a unique position to combine the benefits of a fixed rate mortgage with the savings opportunities of an adjustable rate mortgage. With a hybrid loan you get the best of both worlds.
A hybrid loan gives you a fixed rate term, usually three, five, seven or ten years, with adjustable rates thereafter. These loans are typically expressed as a 3/1, 5/1, 7/1 or 10/1 ARM. The first number represents the number of years the initial rate is fixed. The second number indicates the adjustment interval (how often the interest rate will change). For a 7/1 loan, the fixed period is seven years with annual interest rate adjustment thereafter.
Another popular loan is the 2/28. The introductory rate is fixed for the first "two" years of the thirty year loan. HYBRID ARMS are often best for people who anticipate moving -- and therefore selling the house -- within two to ten years, depending on how long the lower rate will be in effect. An ARM is also a great way to qualify for a larger home purchase. You can always refinance when the fixed period of the loan is up.
Whether you plan to move within 10 years or you’d like the added rate protection a hybrid loan affords, we’ll be glad to help you find the best loan program to meet your needs. We look forward to helping you
