hybrid mortgage

Hybrid Mortgage

An adjustable-rate mortgage in which the interest rate is locked for a rather long period of time. That is, the interest rate is locked for a certain period, often seven years, at which point it may move either upward or downward. Many hybrid mortgages have interest rate caps to offer further protection to the mortgage holder. The initial interest rate on a hybrid mortgage is often lower than market rates, but it carries the risk that after a certain number of years the interest rate will rise to a point resulting in payments that the mortgage holder will not be able to afford.

Hybrid mortgage.

Sometimes called an intermediate ARM, a fixed-period ARM, or a multiyear mortgage, a hybrid mortgage combines aspects of fixed-rate and adjustable-rate mortgages.

The initial rate is fixed for a specific period -- usually three, five, seven, or ten years -- and then is adjusted to market rates. The adjustment may be a one-time change, or more typically, a change that occurs regularly over the balance of the loan term, usually once a year.

In many cases, the interest rate changes on a hybrid mortgage are capped, which can help protect you if market rates rise sharply.

One advantage of the hybrid mortgage is that the interest rate for the fixed-rate portion is usually lower than with a 30-year fixed-rate mortgage. The lower rate also means it's easier to qualify for a mortgage, since the monthly payment will be lower.

And if you move or refinance before the interest rate is adjusted -- the typical mortgage lasts only seven years -- you don't have to worry about rates going up.

However, some hybrid mortgages carry prepayment penalties if you refinance or pay off the loan early. While prepayment penalties are illegal in many states, they are legal in others.

hybrid mortgage

A mortgage that combines the benefits of an adjustable-rate mortgage and a fixed-rate mortgage,such as adjustable rates in the early years and then an automatic conversion to fixed rates after a stated period of time.For example,the 5/25 (adjustable for 5 years and fixed for 25) and the 7/23.

References in periodicals archive ?
(NYSE: TWO), a hybrid mortgage real estate investment trust, has said that it will participate in the 2019 Barclays (LSE: BARC) (NYSE: BCS) Global Financial Services Conference scheduled from September 9 to September 11, 2019 in New York, New York.
is a hybrid mortgage REIT that opportunistically invests in a diversified risk-adjusted portfolio of Agency RMBS, Credit Investments, which include our Residential Investments, Commercial Investments, ABS Investments, and Single-Family Rental Properties.
27 April 2018 - New York, US-based hybrid mortgage real estate investment trust Two Harbors Investment Corp.
The management of SCBPL has devised a policy to steadily give impetus to its consumers banking portfolio by its already well-performing products like personal loans, credit cards and upcoming innovative product like hybrid mortgage financing under Islamic banking.
A mortgage broker who has migrated into the hybrid mortgage banking business "is still an entrepreneur and is still a small business, in many cases, and it's still brokering some of its business," he adds.
(ACR801) Hybrid Mortgage REITs Balance Risk/Returns - Douglas Harter - Credit Suisse Group.
There is also a hybrid mortgage option, which allows you to go for a tracker mortgage and then switch penalty-free to one of the lenders' fixed rate deals later.
By design, a hybrid mortgage contract offers a fixed mortgage rate for a couple of years; after that, the rate is scheduled to reset once or twice a year to the current market rate plus a margin that is prespecified in the contract.
More specifically, they first adjusted mortgage performance for values of observable borrowers' characteristics at origination (e.g., credit scores, LTV ratios, debt-to-income ratios), loan characteristics (e.g., fixed-rate mortgage [FRM] or hybrid mortgage, if homeowner-occupied, presence of prepayment penalty clause), and macroeconomic conditions (e.g., change in unemployment, household income, house price appreciation since origination).
Some 1.3 million subprime hybrid mortgage loans are slated to reset in 2008 and another 422,000 loans in 2009, Bair said.
If you're buying a starter home, for example, and your family is growing, it's likely that you're not going to live there for very long, so you're a perfect candidate for a hybrid mortgage. "The advantage is if your timetable pans out, you'll never face the risk of that adjustable.
(NYSE: TWO), a hybrid mortgage real estate investment trust, has said that it has made an adjustment to the conversion rate for the company's 6.25percent convertible senior notes due 2022.

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