Hybrid ARMS

Hybrid ARM (3/1 & 3/6 ARM, 5/1 & 5/6 ARM, 7/1 ARM, 10/1 ARM, etc…)

Hybrid Adjustable Rate Mortgages, available for loans up to $3 million,  are designed to offer consumers a fixed payment for a specified period of time – 3, 5, 7, or even 10 years – at which time the rate begins adjusting in accordance with the open market.  Rates offered on these programs are lower than fixed rate mortgages which make them attractive to people looking for short term financing solutions. With the lower interest rate comes a lower payment. The disadvantages of this mortgage type lie in the adjustment;  caps, max rate adjustments, adjustment cycles, referenced indexes, and the lenders margin are all important factors that many fail to discuss.  Make sure you review all your options and cover these details with a mortgage specialist when shopping for this type of loan program.