Have you considered a hybrid adjustable mortgage?

Written by Syd Johnson


If youíre not sure if you should sign up for an adjustable rate mortgage (ARM) or a fixed rate mortgage, youíre not alone. It is very easy to get excited when thinking about your new home, and then get feel a bit deflated when it is time to start thinking about financing.

Part ofrepparttar challenge for any home buyer is to reconcilerepparttar 150849 fact thatrepparttar 150850 introductory rates on adjustable rate mortgages can be so low. In fact, they are often lower thanrepparttar 150851 market rate, and considerably lower thanrepparttar 150852 rates on fixed rate mortgages. Now, you can get an ARM and some ofrepparttar 150853 benefits of a fixed rate loan withrepparttar 150854 hybrid adjustable rate mortgage.

A hybrid ARM is one whererepparttar 150855 rate is locked in forrepparttar 150856 first few years ofrepparttar 150857 loan and then will go back to market rate atrepparttar 150858 end ofrepparttar 150859 lock-in period. The lock in period is quoted up front and written intorepparttar 150860 adjustable rate mortgage contract. This period can vary from five years on up. Depending on your credit history,repparttar 150861 amount ofrepparttar 150862 loan, and your experience with your mortgage lender, you can negotiate lock in term as high as eight or eleven years.

This type of loan is ideal for anyone who plans to stay in their home forrepparttar 150863 first few years and then move to another place. Couples, young home owners, first time buyers and anyone who is upwardly mobile. The average American spends about nine years in their first home. If you fit into this profile, you can get a hybrid adjustable rate mortgage, get a fixed rate forrepparttar 150864 first five to ten years and then sellrepparttar 150865 home beforerepparttar 150866 rate starts to fluctuate again.

So which is better fixed rate or adjustable rate mortgage?

Written by Syd Johnson


This is a question that keeps coming up when customers start looking at purchasing or refinancing their home. If you look atrepparttar average 30 or 15 year mortgage, it seems thatrepparttar 150848 better mortgage depends onrepparttar 150849 type of customer. The best mortgage is one that fits in your long term budget, wonít use up too much of your monthly income, and gives you a sense of control over your home so you donít end up house rich and cash poor. Letís look atrepparttar 150850 basics.

A fixed rate mortgage gives you sense of control because you know what your interest rate will be forrepparttar 150851 next 30 years. The only concern is thatrepparttar 150852 market rate might go down at some point inrepparttar 150853 future and you will end up paying more thanrepparttar 150854 current interest rate. You can change this by refinancingrepparttar 150855 loan to lower your payments and get a lower interest rate.

An adjustable rate mortgage allows you to play withrepparttar 150856 market rate knowing that sometimes you will be more thanrepparttar 150857 market interest rate, and other times you will be paying slightly less. Overall, ifrepparttar 150858 economy stays healthy you should feel like you maderepparttar 150859 best decision and did not overpay for your home.

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