Other Mortgage Types
Balloon Loans
One type of mortgage, known as a balloon loan, appears at first blush to be somewhat like a hybrid loan. The interest rate is fixed, for example, for five, seven, or ten years. However, at the end of this time period, the entire loan balance becomes due.
Hybrid Loans
Hybrid loans or what lenders sometimes call intermediate ARMs start out like a fixed-rate loan (the initial rate may be fixed for three, five, seven, or even ten years) and then the loan converts into an ARM, adjusting every 6 to 12 months thereafter.
