What is Subprime Credit Meltdown?
A type of mortgage given to individuals who have less-than-excellent credit rating. Individuals who apply for subprime mortgages are viewed as having a larger risk of defaulting the loan. Thus they are given higher interest rates compared to conventional mortgages in order to compensate the risk based on their credit score. Borrowers with a credit rating below 600 will remotely qualify for a conventional mortgage. Thus, borrowers work on their credit rating so that they can qualify for lower interest rates.
MortgageRates :: Jan.27.2008 :: Mortgage Rates :: No Comments »