Low-Rate Subprime Mortgages for Unqualified Borrowers
Subprime mortgages have been blamed for the 2008 financial crisis, and come with certain restrictions.Formula
Term = Loan Amount/(Monthly Payment - Interest Payment)How do I calculate the subprime mortgage?
Due to the higher interest rates associated with subprime mortgages, it is important to carefully calculate the terms of your mortgage. To calculate the term of your mortgage, use the formula Term = Loan Amount/(Monthly Payment - Interest Payment). You can use Sourcetable to make the calculations easier. Make sure to take into account the restrictions that may come with a subprime mortgage before committing to one.
What is a subprime mortgage?
A subprime mortgage is a type of mortgage loan that carries a higher interest rate than a prime mortgage.
Who can get a subprime mortgage?
Subprime mortgages are offered to borrowers with credit records that may be impaired.
Can the interest rate on a subprime mortgage change?
Yes, the interest rate on a subprime mortgage may rise over time.
Key Points
How do I calculate subprime mortgage?
Term = Loan Amount/(Monthly Payment - Interest Payment)
Subprime Mortgage
A subprime mortgage is a type of mortgage with a higher interest rate than a traditional mortgage. It is typically used by borrowers with less-than-perfect credit or limited income who may not qualify for a prime mortgage.
Interest Rates Can Increase
Interest rates on subprime and prime ARMs can rise significantly over time. This is because these mortgages are typically adjustable-rate mortgages, which allows the lender to adjust the interest rate periodically. This means that borrowers could find themselves paying much higher rates than when they first obtained the mortgage.
