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Lenders today are hawking all sorts of seemingly low-cost mortgages that in fact can be lethally expensive, such as interest-only and adjustable-rate mortgages that have a set rate for just one year. Sure, they cost less initially, but once the adjustments kick in, you can be staring at some truly scary price hikes.

The absolute safest mortgage is a 15- or 30-year fixed-rate loan. (The interest rate never changes, thus the fixed.) Another option is known as a hybrid mortgage. The typical hybrid is 5/1, 7/1, or 10/1, which means the interest rate is fixed for the first period (be it five, seven, or 10 years) and then converts to a rate that can change every year. The advantage of a hybrid is that the starting interest rate will be lower than on a fixed-rate loan. And if you move within that initial period, you won't be hit with an adjustment (but make sure beforehand that there are no prepayment penalties).
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