Mortgage type that is a cross between two popular home loan types; it has features of both the fixed rate mortgage and the adjustable rate mortgage. In this situation, the mortgage interest remains unchanged for a certain number of years, and thereafter it starts to rise in step with the market interest rate up to a limit (rate cap) set in the mortgage agreement. Often the interest rate in a hybrid ARM is substantially lower than in the other types because the interest rate risk is shared between the lender and the borrower. It is considered more suitable for those who plan to sell their house between five to seven years.
Related information about hybrid ARM:
- Hybrid ARM Definition | Investopedia
An adjustable-rate mortgage blends the characteristics of a fixed-rate mortgage and an adjustable-rate mortgage. This type of mortgage will have an initial fixed ...
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Definition of hybrid ARM: Mortgage type that is a cross between two popular home loan types; it has features of both the fixed rate mortgage and the adjustable ...
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Sep 21, 2012 ... There are many misconceptions and lack of knowledge surrounding the VA Hybrid Loan among veteran homeowners.