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Generally, the first number of Hybrid ARM will tell you how long the fixed interest-rate period will be. The second numbers will show how often the rate will be adjusted after the fixed rate period. For instance, 1/1 ARM means that you interest rate will be fixed in the first year, and then the interest rate will be adjusted every year.
Benefits of Hybrid ARMs:
Hybrid ARMs have advantages of both fixed rate mortgage and adjustable rate mortgage. With a hybrid loan, you will get a lower fixed rate than a typically 30 year mortgage. This is an attractive loan choice for home buyers who plan to sell their home within the first 10 years. While you are living in home, you will get a lower fixed interest rate. If everything goes as plan, you won’t be charged for adjustable rate until you are ready to move out.
Hybrid ARM is probably not an appropriate loan choice for borrowers with a good chance of moving within 10 years. But even if circumstances change, a fixed rate mortgage gives the borrower some breathing room.
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A Basic Variable Loan Program is quite similar to a standard variable loan except that a few additional features and the associated flexibility and benefits of these features are missing in a basic variable loan.
