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Here's What A VA Hybrid Loan Can Do

By Sallie B. Leiter

Republish: EasyPublish™
Published: 15Mar2012
Word count: 1408
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If you are among the many military veterans that are hoping to purchase a home through the Department of Veteran Affairs' mortgage program, you have likely already heard of a VA hybrid loan. Many people probably think of an extraordinarily fuel efficient car when they hear the term 'hybrid' nowadays, but it actually refers to the dual nature of this special type of mortgage. Some veterans are not completely sure what this unique financing option is all about, so we're going to take a moment to clarify its few key features and why they matter to you.

The most noteworthy factor of this mortgage type, and how it gets its name, is the fact that it starts out with a fixed interest rate that will later be changed to an adjustable rate. There are various options that offer a three year and a five year period with the fixed introductory rate before switching over to an adjustable rate for the rest of the mortgage. This lets you start with a lower interest before switching to a rate that offers a good bit of flexibility for lenders.

Having a mortgage that begins with low rates will allow you the chance to get into a larger or more extravagant home at a much lower cost than with a conventional mortgage. Low rates also mean that you will be able to pay towards your principle before you know it, which will let you get your balance down and your home paid off faster.

What's really significant about the adjustable rate in a VA hybrid loan is the fact that it is nothing like the adjustable rates that you would get from a typical lender. There are certain regulations in place with the intent of keeping the rate low and preventing it from making any erratic changes.

The adjustable rates of this mortgage type is only allowed to go up or down by one percent a year, and there is a cap on how many percent the rate is allowed to change over the duration of the mortgage. With these regulations in place, you always know the kind of changes to expect and can be confident that they will not be harmful to your ability to afford your home.

With the special regulations in order and the fact that the interest rates are bound to be pretty low in the first place, it's kind of hard to argue against a VA hybrid loan. Now that you realize why they are such a big deal and how they can help you, it may be time for you to look into getting one yourself.

VA Home Loan program makes it easier for veterans to qualify for home financing with less stringent income and credit qualifications; just check out va hybrid and va loans.

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