WHATS WITH THE SUBPRIME MORTGAGE MELTDOWN?
A lot of what’s happening with the subprime mortgages is that adjustable rate mortgages, which make up a large portion of the subprime mortgage market, are adjusting. That causes payments to balloon, and borrowers can’t afford the payments anymore. So they’re being forced to refinance the loan or sell the house. That’s why we’re seeing so many foreclosures on houses that were purchased with subprime loans. Click Here to visit CBSNews.com’s real estate sectionLENDERS DON’T ADVERTISE SUBPRIME MORTGAGES. HOW DO POTENTIAL BORROWERS KNOW IF THE MORTGAGE THEY’RE BEING OFFERED IS SUBPRIME? Lenders won’t use the term “subprime” to describe a loan. So the main thing you want to look at is the interest rate. If the interest rate being offered is above market, you’d get a bad deal. Subprime means these were risky loans to begin with. People who get subprime mortgages have a lot of financial baggage: late paying bills, filed for bankruptcy, etc. I know homeownership is the American Dream, but if y
A lot of what’s happening with the subprime mortgages is that adjustable rate mortgages, which make up a large portion of the subprime mortgage market, are adjusting. That causes payments to balloon, and borrowers can’t afford the payments anymore. So they’re being forced to refinance the loan or sell the house. That’s why we’re seeing so many foreclosures on houses that were purchased with subprime loans. Click Here to visit CBSNews.com’s real estate sectionLENDERS DON’T ADVERTISE SUBPRIME MORTGAGES. HOW DO POTENTIAL BORROWERS KNOW IF THE MORTGAGE THEY’RE BEING OFFERED IS SUBPRIME? Lenders won’t use the term “subprime” to describe a loan. So the main thing you want to look at is the interest rate. If the interest rate being offered is above market, you’d get a bad deal. Subprime means these were risky loans to begin with. People who get subprime mortgages have a lot of financial baggage: late paying bills, filed for bankruptcy, etc. I know homeownership is the American Dream, but if y
