2 Year Morgage: This is an Adjustable Rate Morgage that has an initial 'Fixed Rate' period
of 2 years (24 Months). During this period the interest rate and the monthly payment will remain
constant. After the expiration of those two years the loan will then adjust in relation to a morgage
Index.
It should be noted that 2 yr Morgages are almost always 'subprime' or 'alt-a' loans. In other words,
they are traditionally only offered to people with less-than-perfect credit. Since most of these loans
are offered by such lenders and most 'subprime' lenders have loans with prepayment penalties then you
can deduce that most two year morgages also have prepayment penalties (though not all of them have
such penalties).
The benefit of these types of loans is that the interest rate is lower than it would be if you were
to get a thirty year fixed loan. This means you can get a lower payment and then refinance into a
lower rate once the initial two years is over.
2 Year Morgage ARM - Rates and Loan Information For 2 yr ARM's...
