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Adjustable Rate Mortgages / Fixed Rate Mortgages / Combination Rate Mortgage
Combination Rate Mortgages
Should I Choose a Combination Rate Mortgage? Combination rate mortgages combine fixed interest rates and adjustable interest rates. Lenders often refer to these loans as hybrid loans. For the first 2 or 3 years, the interest rate is fixed. It remains the same and so does your monthly payment. During the remaining years of the loan, your interest rate becomes adjustable and can vary.
A combination rate mortgage may suit you if:
During the first 2 or 3 years, combination rate loans typically have lower interest rates than fixed rate loans. Monthly payments are lower and you may be approved to borrow higher amounts.
If you have a lot of consumer debt - credit card balances, medical bills,
high-rate automobile loans - these loans are a good choice. The amount of debt
you have can be higher than on other types of loans.
You may want to use combination rate loans to refinance a home and consolidate debt. Using what cash that may be available, you may pay off your bills. Then, all your debt is in the form of a home loan. You make 1 payment per month instead of a dozen. And your total monthly payment is lowered.