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What
is a 2/28?
This is a loan program that is fixed for two years then becomes an adjustable
rate mortgage or an ARM. It has significantly lower rates than a 30-year fixed
sub-prime loan. The sub prime market is a great resource we have for loans
without having to meet the prime market's stringent requirements for income,
assets, down payment, mortgage insurance, and credit.
What is the key benefit?
The key benefit of this loan is that it allows a borrower to be a homeowner while
the borrower repairs his or her credit instead of becoming a homeowner after
the borrower repairs his or her credit. At the end of the 2-year fixed period,
the borrower would refinance for a better rate or program because he or she now
has 24 months of on-time mortgage payments along with an improved credit score.
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