VA Hybrid Loans: The Definitions

VA Hybrid Loans offer the lowest interest rates and substantial savings for veterans. In order to understand these loans better we are providing some definitions.

By understanding these definitions, you will understand the true power of VA Hybrid Loans.

Fixed-rate mortgage

This, by far, is the most popular mortgage on the market. People like this mortgage because of its stability. But stability can cost you money over time. You will have higher payments and higher interest rates. The most popular types of fixed-rate mortgages are the 15 and 30 year mortgages.

Adjustable rate mortgages

The rates for adjustable rate mortgages fluctuate. Sometimes they fluctuate quite often. These usually start with a low rate that lasts maybe a year. And after the teaser rate, the rate will usually jump. Luckily, ARMs usually have a maximum rate that you'll pay. This means that your loan will only rise a certain amount before it can't go any higher. For a lot of adjustable rate mortgages the cap is a 5%. On a typical arm loan, your interest rates will start to climb once your teaser rate year is complete. This means that you will pay more over the life of your loan.

VA Hybrid Loans

This is best of all the loans. VA Hybrid Loans are usually for three or five years. Instead of just a one year locked-in rate, you'll be locked into a rate for either three or five years. And just like a traditional ARM your interest rate will never climbed more than 5%. And after your initial three are five years, your loan rate will only adjust once a year and only 1%. The life for these loans is typically 30 years.

Knowing the definitions, will help you to make a better decision about VA Hybrid Loans. If you have additional questions, our qualified lenders can answer those for you.

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