Hybrid Mortgage: Combination of fixed and adjustable rate

Sam

Hybrid Mortgage is a type of Mortgage, which combines the features of both fixed and adjustable rate mortgage. It is also known as a 'two step mortgage' and 'alternative mortgage products'. It is a special type of 7/23 mortgage and 5/25 mortgage, which has one time rate adjustment after 5 or 7 years.

Features of hybrid mortgage are as following:

It is a special type of adjustable rate mortgage.
The loan will start from a fixed rate of interest at certain length of time,
and then later it will convert to an adjustable rate mortgage.
There is no additional refinancing cost, no forms to complete, and no re-qualification necessary for making adjustments in interest rates.
It adjusts only once, either at 5 years or 7 years.

For Example, Fannie Mae's two step mortgage and balloon mortgage.

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