The VA Hybrid Loan combines the stability of a fixed rate mortgage with the increased savings of a lower rate adjustable rate mortgage.
Many conventional adjustable rate loans feature more frequent rate changes tied to volatile foreign financial indexes. VA Hybrid loans have lower rates and longer fixed rate periods after which they may adjust only once per year and not by more than 1%. Best of all, VA Hybrid loans are tied to a stable US Treasury Index and feature guaranteed rate caps which protect veterans over the entire life of the loan. The VA Hybrid programs help Veteran homeowners take advantage of rates far below that of comparable 30 year fixed mortgages with no additional fees or finance charges.
Higher Monthly Savings - Lower rates help Veterans on fixed incomes save the most amount of money each month.
Faster Debt Reduction - Significantly lower start rates provide veterans more money to pay down higher interest rate debt.
Accelerated Mortgage Payoff - Savings applied to the principal balance help Veterans pay off their homes even faster with no change in current monthly payment.
Guaranteed Limits in Rate Adjustments - After the fixed rate period expires, the rate may only adjust once per year and by no more than 1%.
Faster Breakeven Periods - Lower rates with no additional fees compared to traditional fixed rate options mean the VA Hybrid loan pays for itself even faster.
Potential Rate Decreases - VA Hybrid loans adjust upward AND downward depending prevailing index rates. Many veterans in VA Hybrid loans now in adjustment have seen their rates decrease in recent years.
The 5/1 Hybrid
Guaranteed with a fixed rate for 5 years, this loan is the safest and most popular option among veteran homeowners who feel they will likely sell or refinance their homes within 8 years. For growing families and empty nesters who know they will eventually need a different size home, the 5/1 Hybrid Loan offers the perfect combination of low rates and predictable payments for their remaining years in the home.
The 3/1 Hybrid
Guaranteed with a fixed rate for 3 years, this program features the lowest start rate and payment of any VA Loan available. This is the most attractive option for those veteran homeowners who feel they will sell or refinance their homes within 5 years. This is the best choice for those experiencing heavy debt loads, or those who anticipate moves in the near future including active duty military personnel expecting transfer and those contemplating job changes that require relocation.