VA Hybrid Loans are available to veterans. These loans offer interest rates below what conventional loans are able to offer you.VA Hybrid Loans are a combination of a Adjustable-Rate Mortgage (ARM) and a fixed-rate mortgage. They combine the best of both of these types of loans. They have a fixed-rate period of 3 or 5 years, followed by an adjustable time that lasts the duration of the loan.
Save money with VA Hybrid Loans
Veterans can save more money with VA Hybrid Loans than they could with a conventional fixed-rate loan or ARM.
Experts predict a rise in real estate interest rates in the not too distant future. Hopefully, they'll never get to the 18% they were in the 1980s, but anything is possible. If this did happen again, some folks would have a hard time keeping up with their payments as they continued to rise.
Luckily the VA Hybrid loan can offer some protection against these rising rates, especially if you lock in now.
If you're looking for some stability and have heard that ARMs may not be the best choice for you, you should really look at VA Hybrid Loans. Most people stay in their homes for about 7 years. So VA Hybrid Loans with fixed periods of 3 or 5 years would offer you security during this time.
Although your interest rate will adjust after the initial fixed-period, thanks to the yearly cap of 1% you'll be shielded from interest rates that are rising much quicker. If rates are rising at 3% per year, you save 2% by getting in a safe VA Hybrid Loan.
Additionally, you'll have a lifetime cap of 5% from where you started. A loan that starts at 2.25% will only rise to 7.25% max. If either of these caps don't give you enough assurance, or you find you want to get out of your VA Hybrid Loan, you can always streamline out it later.