Can someone explain this type of loan in leymans terms please.

Thanks in advance

2 year fixed. 28 yr adjustable..ammortized over 30 years.

The rate will basically stay fixed for two years, after the 2nd year, the rate will adjust to whatever the index is plus the margin. It will be interest only for a couple years before it recast.

Ah, that makes sense! Do you know what the average rate is? Is it normally 2 loans or 1? Thanks

youll run into 2/28 when dealing with subprime lenders. When your going Alt A or A paper..the terms are usually 3-1, 5-1, 7-1. Same concept though. Its hard to say the average rate because subprime lenders base it off of fico and ltv. 2/28's are usually one loan, but can be two if you do an 80/20 combo.