Saturday School: What Is a Hybrid ARM Mortgage?

Saturday School: What Is a Hybrid ARM Mortgage? Photo by Idutko / Shutterstock.com

Most homebuyers who take out a mortgage assume they have two options: a fixed-rate mortgage or an adjustable-rate mortgage.

But there is a lesser-known alternative: the hybrid ARM mortgage.

A hybrid ARM is a blending of an adjustable-rate mortgage and a fixed mortgage. This type of loan can make sense for some borrowers, saving them money over the life of the loan. But a hybrid ARM is not without risks.

Watch this video from Khan Academy to learn about the pros and cons of a hybrid ARM mortgage, and whether or not it’s the best choice for you.

Which type of mortgage did you choose? Let us know by commenting below or on our Facebook page.

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