Hybrid adjustable rate mortgage?
1 answersQuestion asked ( August 19, 2009 , Shopping / Finance )
I don’t understand what it is with bankers! They always talk financial terminologies which a common man cannot understand. My banker was suggesting to me hybrid arm. Can someone explain to me in simple terms what hybrid arm is and why i should opt for it?
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Answer
We completely understand how complex financial terminologies can be. So let us make it simple for you. A Hybrid ARM is nothing but a mortgage that combines the features of fixed rate mortgage and an ARM. This type of mortgage will typically provide a fixed interest during the initial period of the loan and ARM rate applies after the fixed rate expires. The date of expiration of the fixed period interest is pre-determined. You as the borrower need to carefully evaluate a Hybrid ARM and take cognizance of the time when the mortgage converts from Fixed to ARM else it may impact your cash flow substantially.
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