| fixed for the first six months and adjusts every six months home equity loan in california The 2/28 "Hybrid ARM" is a 6 month ARM that the borrower has purchased a "Rate Lock" or introductory rate for the first 2 years (this is also done in 3,5,7 year fixed periods), and then the loan becomes a 6 month ARM thereafter, home equity loan in california than a loan that does only adjust every 2 years. The benefits This loan product has actually lowered the costs of borrowing in the early years of loans, but certainly is a source of continuing refinance business to the Mortgage industry. They home equity loan in california borrowers take advantage of special pricing, by saving money on payments when the borrower's a) salary is rising such as for young professionals or b) when the borrower knows they are going to move up quickly from one home to home equity loan in california The risks If a borrower is inconsistent in their on time payment history, afflicted by tragedy which causes a credit problem, or keeps insufficient funds in reserve (the payment savings from the lower rate for example), as referenced above, the rates in Hybrid ARMs will certainly rise, and with insufficient credit and home equity loan in california the borrower may be forced to trade equity for time, and in some markets, not as advantageously as |
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