Merrill Lynch offers new mortgage product

Merrill Lynch is now offering its blended-rate mortgage, which combines the lower rates of an adjustable-rate mortgage with the lower risk of fixed-rate home financing.

The blended-rate mortgage combines a fixed rate and an adjustable rate during an initial period of 3, 5 or 7 years. The blended rate increases or decreases half as much as a traditional ARM. The mortgage includes interest-only payments during the blended period and rates are adjusted semi-annually based on the 6-month London Interbank Offered Rate.

After the blended period, the loan is amortized and the interest rate continues to adjust semi-annually based on the 6-month LIBOR plus a margin of 2 percent.

Other features include no prepayment penalties and large loan amounts available, including jumbo loans.

Merrill Lynch is one of the world's leading financial management and advisory companies, with offices in 35 countries and total client assets worth about $1.5 trillion.

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