Short Term Hybrid Loans

The mortgage industry is receiving a lot of criticism for giving borrowers access to large sums of money that they would not otherwise qualify for. Many of the foreclosures now occurring are the result of hybrid loans. Hybrid loans allow you to borrow now with the idea of paying later. The first three to five years have excellent terms and low payments. After that, both go up dramatically and many people can’t afford them thus resulting in foreclosure. Such loans, however, have their place. If you are sure you are only going to be living in an area for three to five years, a hybrid loan can be an excellent choice. Why pay higher rates on a fixed rate loan when most of your payments in the first five years will just go to interest? There isn’t any reason.