Subprime Mortgage

A subprime mortgage is a loan offered to borrowers with weaker credit histories, meaning they are considered higher risk. Because of this increased risk, lenders typically charge higher interest rates and may require smaller down payments. These loans are often used by people who don’t qualify for traditional mortgages. While they can help some buyers afford a home, subprime mortgages also carried higher chances of default, which contributed to the 2008 financial crisis. Essentially, subprime mortgages are riskier loans that come with higher costs for borrowers who have less-than-ideal credit profiles.