The Secret of Hybrid ARMs: The Best of Conventional and ARM Loans

Hybrid ARM Loans have a jumpstart on conventional loans in a couple of important ways. This article will take a look at the different loans available and why Hybrid ARM Loans for Veterans are the best choice.

There are 3 basic types of conventional loans: fixed-rate, adjustable-rate, and hybrid ARM (combination of the two). Hybrid ARM Loans for veterans (aka VA Hybrid Loans) offer a fourth better option.

Of the 3 basic types of conventional loans, fixed-rate loans are the most popular. They are also the most popular because they provide a stable interest rate of the 15 or 30 year life of the loan. The downside of these loans is that they usually cost your more on a monthly basis.

The second basic type of conventional loan, is called an adjustable-rate, variable-rate, or ARM. It has interest rates that change. Depending on the terms on the loan, these ARMs can start changing in the very first year of the loan. Sometimes they can change multiple times in a given year. The rates of these loans change based on financial indexes. Many conventional ARMs are tied to fluctuating foreign financial indexes. Because these rates change, lenders will often give you a lower starting interest rate.

The third basic type of conventional loan is the hybrid ARM. These have characteristics of both fixed-rate and adjustable-rate loans. They only have the best features of both. The fixed-period lasts three to five years depending on which of the two major types of hybrid ARMs you choose. After this initial fixed-period, the rate can change. However, there are two caps on how much your rate will move. These two caps are a yearly cap of 1% and a lifetime cap of 5%.

Hybrid ARM Loans for Veterans (VA Hybrid Loans) on top of everything offered by conventional hybrid ARMs also come with a partial guarantee from the U.S. Government. This allows lenders to give you even lower rates than conventional hybrid ARMs.

You can only get a VA Hybrid Loan from a VA-approved lender. We have VA-approved lenders. Call us now to find out how Hybrid ARM Loans for Veterans would save you a lot of money.

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