A combination fixed rate and adjustable rate loan - such as with the 5/5, 7/23, and 10/10/10 mortgages - can offer the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a longer period of time than most adjustable rate loans. For example, a 7/23 mortgages has a fixed monthly payment and interest for the first seven years and then turns into a traditional adjustable rate loan, based on then-current rates for the remaining 25 years, adjusting once per year. The 5/5 has a fixed monthly payment for the first five years, adjusting once every five years thereafter, and the 10/10/10 has a fixed monthly payment for the first ten years, adjusting once every ten years thereafter. Fixed/Adjustable Mortgages are a good choice for people who expect to move or refinance, before or shortly after, the adjustment occurs.
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