how do arm mortgages work
What is the difference between and 5 / 1 ARM mortgage and the new hybrid mortgages. . .?
Which are fixed for five years and then as a variable?
There is no difference. Both begin with a fixed interest rate for a period of time and then adjusts the speed accordingly. In a 5 / 1 ARM, interest rate is fixed for 5 years and then adjusts every year thereafter. In a hybrid mortgage that begins as a fixed rate and converts into an adjustable mortgage. Both are a huge gamble. One can only hope that the interest rates go or stay about the same. But if interest rate goes up, you can get in trouble, as was your monthly payment. Thats why you often hear on the news that many people protected their homes. You can not afford the increasing monthly payments.
