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Definitions from the Web

Subprime Mortgage

Description:

A subprime mortgage is a type of mortgage loan that is offered to borrowers with poor credit history or low credit scores. It usually carries a higher interest rate compared to prime mortgages due to the higher credit risk associated with these borrowers.

Senses and Usages:

1. Noun - Financial Definition:

In the world of finance, a subprime mortgage refers specifically to a mortgage loan that is offered to borrowers who have a high risk of defaulting on the loan due to their weak credit history.

Example Sentence: Many financial experts agree that the subprime mortgage crisis of 2008 was one of the major factors contributing to the global financial crisis.

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2. Adjective - Popular Usage:

In popular usage, the term subprime mortgage often describes a home loan given to borrowers who have a less-than-ideal credit history, but it has become synonymous with the predatory lending practices that were prevalent before the financial crisis.

Example Sentence: Many families faced foreclosure after being trapped in subprime mortgage loans with skyrocketing interest rates they couldn't afford.

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3. Adjective - Local Usage:

In certain local contexts, a subprime mortgage may refer to a home loan that is tailored to borrowers who are seeking housing in underserved or economically disadvantaged areas, where traditional lenders typically hesitate to offer loans.

Example Sentence: The local government implemented a program to encourage subprime mortgages as a means of revitalizing the economically distressed neighborhoods.

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