Two Popular VA Hybrid Loans

Before we mention the two main options of the VA Hybrid Loan, it is important to note that the VA, besides a small fee, will not request additional fees or finance charges. Be sure to discuss all of the fees that will be charged with your mortgage specialist.

With either of the VA Hybrid Loan options, you will be safeguarded against a time of runaway interest rates. The VA Hybrid Loan provides to specific guards: an annual interest rate cap and a lifetime interest rate cap. If the interest rates increase 2%, you'll only go up 1% in any given year. If they continue upward, you will cap out at only a 5% increase. Over a 30-year loan, this alone will save your thousands, perhaps, tens of thousands of dollars.

Knowing that you have these caps could be assurance enough, but VA Hybrid Loans are also tied to the very stable U.S. Treasury Index. Other ARMs are tied to more inconsistent indices in foreign financial markets.

With that background then, let us introduce the two main types of the VA Hybrid Loan.

1) The 3-year VA Hybrid Loan. As the name suggests, this loan is fixed for 3 years. If you think you'll be in your home for only a short period, take a look at this loan. If you think you're up for a transfer soon in your military responsibilities, this could be worthwhile and could save you money even during that short period you're in your home.

2) The 5-year VA Hybrid Loan. It's just the same as the 3-year, but over a 5-year period. Because it's longer, the interest rate will probably be a little higher. But because it's longer, you could also have greater peace of mind and feel more stability because it remains the same for five years.

Please call us to find out which of these two VA Hybrid Loan options would be the best for your family and situation.