What Are Subprime Mortgages?

Subprime mortgages are a type of mortgage loan that are granted to individuals with low credit scores, who would otherwise not qualify for conventional mortgages due to those scores and other financial indicators. Due to the fact that these borrowers lack of financial stability, subprime mortgages pose higher risks for lenders. Lenders account for the associated higher risks by imposing higher interest rates on subprime mortgages.