What is a subprime mortgage?

A subprime mortgage is a type of mortgage loan offered to borrowers with a less-than-perfect credit score or a low-income. These loans typically have higher interest rates and cost more than conventional mortgages. Subprime mortgages are often a last resort for those seeking to purchase or refinance a home in Virginia. Subprime mortgages are considered higher-risk than other types of mortgages since borrowers are more likely to default on their loan payments. The risk of default could mean that lenders may charge higher interest rates or fees to ensure they get their money back in the event that the borrower defaults on the loan. In Virginia, subprime mortgages are regulated by the Virginia State Corporation Commission (SCC). The SCC enforces regulations designed to protect borrowers and lenders. They require lenders to provide full disclosure to borrowers, including an explanation of the terms of the loan, the interest rate, and any fees. It is important for borrowers in Virginia to familiarize themselves with the regulations of subprime mortgages before entering into a loan agreement. Even though subprime mortgages may offer more opportunities for borrowers who may not qualify for conventional loans, the increased interest rate and fees make them more costly in the long run.

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What is a subprime mortgage?

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