A subprime mortgage is a type of home loan issued to individuals with lower credit ratings. Given that these borrowers typically present a higher risk of default, subprime mortgages usually come with higher interest rates and less favorable terms compared to prime mortgages. This article delves into the characteristics, implications, and considerations of subprime mortgages.
What is a Subprime Mortgage? Definition A subprime mortgage is designed for borrowers who do not qualify for a conventional prime mortgage due to their lower credit scores or poor credit history. Standard criteria for subprime borrowers typically include credit scores below 620, although different lenders may have varying thresholds.