subprime mortgage
High-risk home loan
A subprime mortgage is a home loan extended to borrowers with poor credit histories or other risk factors that disqualify them from conventional financing.
Subprime loans carry higher interest rates to offset the lender's risk.
The term gained notoriety after the 2008 financial crisis, when widespread defaults on subprime mortgages triggered a global economic collapse: The housing bubble was inflated by reckless subprime lending.
- loanBorrowed money repaid later
- credit scoreNumerical measure of borrower reliability
- housing bubbleUnsustainable property price surge
- housing crashSudden property value decline
- interest rateCost of borrowing money
bad credit · financial crisis · too big to fail · foreclosure · borrower · easy money · debt-to-income ratio · delinquency · recession · underwriting · credit history · predatory lending · refinancing · down payment · collateral · lender · systemic risk · risk premium
- mortgageshome loan, home loans, down payment, refinancing, refinance
- financial failuresbankruptcy, insolvency, foreclosure, liquidation, default
- SecuritizationABS, CDO, CMO, tranche, tranches