Subprime Mortgage (“B” Mortgage)

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A subprime or “B” mortgage refers to a mortgage loan made to a less creditworthy borrower. This can be someone with a low credit score, high debt ratios or insufficient proof of income. To account for the greater risk, lenders charge a premium on the interest rate and carefully scrutinize the marketability of the property since they rely heavily on its equity.

See also: Prime mortgage, Alt-A Mortgage

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