Hybrid ARMs (3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM)

These are also called fixed period adjustable rate loan mortgages (ARMS). These loans start off with a low fixed rate that is fixed for a set number of years. After that the loan becomes a fully adjustable rate mortgage.

 Example: A 30 year hybrid with 5 years at 5% and 25 years adjustable.
(This is only and example. Your rate would be what you qualify for).

These loans are great for those who do not expect to stay in their home for a long period of time. But it still allows you to get a low fixed rate for that short period. Also a lower payment.

Interest Only Mortgages
With this loan the interest only payment will save you money in the short run because it actually cost you more over a 30 year term of the loan. But most borrowers who get into this loan will ---- out of this before it fully amortizes itself.

Example: If you borrow 250,000 at 6% using a 30 year fixed rate loan, your monthly payment would be roughly $1777. But if you borrow 250,000 in a 30 year mortgage with a 5 year interest only payment plan your payment would be $1250. Now you can see the obvious savings. But if you allow this to fully amortize then your payment would go up to about $1611. Possibly you might have a  higher income by then and you can afford to have your payment jump over $360. If not, you would want to refinance out of it.

This loan is great for someone with a sporadic income. That way you can afford the interest only payment. And, when your income goes up you can pay down the principle.

Even though you have been approved and/or a fixed rate mortgage, your monthly payment may vary it you have an ???? account. Which means in addition to your loan payment the lender collects money each month from those who put down 20% ?????????????????????.