The reality of todays market is that interest rates are higher than rates from the past few years. What this means for first time homebuyers, real estate investors, and property owners with adjustable rate mortgages is that monthly payments for the traditional 30 year mortgage are becoming more and more of a financial burden.
Fortunately, for current and prospective homeowners who have good payment histories over the last two years and credit scores above 620, an emerging product is making monthly payments for mortgages both affordable and safe.
Hybrid Arms
Similar to Option-Arm mortgages, Hybrid Arm mortgages have 4 different options for monthly payments. These options are:
1.Minimum Payment – minimum paymentcan lead to negative amortization.
2.Interest Only Payment – payment on only the interest of the mortgage
3.15 year Amortized Payment – payment towards the principal and interest based on a 15 year term
4.30 40 year Amortized Payment – payment towards the principal and interest based on a 30 or 40 year term
The primary difference between an Option-Arm mortgage and a Hybrid Arm mortgage is the...
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