Quote:
Originally Posted by ShortNCuddlyAm
 My bad, didn't explain that at all well!
OK, in the UK, you borrow x amount for a period of, say 20-30 years. The default will be a variable rate mortgage. However, especially at the start, you may choose to have a fixed rate for a short period - say 3-5 years. Which is what I meant by fixed term  |
Yes, that is similar to what I explained with the ARM adjustment terms. Most ARMs that I see advertised are what they call 1/2. Those are the CAP. The first number is how many times a year is can adjust and the second is how far is can adjust. So a 1/2 means it adjust every 1 year and can't adjust up more than 2% points.
We do have all types of mortgage products though. They are basically designed to find something that will meet the underwriting requierments. Basically, do all they can to write the loan. We have hybrids like you mentioned and we also have convertibles which is the opposed of what you said, where it is adjustable and at any time you can lock the current rate as a permanent fixed rate for the rest of the term.
The bottom line is, if people could get lower mortgage payments and stay in the same house, they would!
BOb