A loan for borrowers who do not qualify for loans at the usual market rate of interest because of a poor credit rating or because the loan is larger than justified by their income is

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A loan for borrowers who do not qualify for loans at the usual market rate of interest because of poor credit rating or large loan size is typically referred to as a subprime mortgage. This type of loan carries a higher interest rate to compensate for the increased risk of default. Securitized mortgages refer to loans that have been packaged together into a pool and sold as a security to investors. Insured mortgages are subsidized by the government and often have lower interest rates. Finally, graduated-payment mortgages allow for lower initial payments that increase over time.

A Loan for Borrowers Who Do Not Qualify for Loans