Sub prime mortgage Meaning and Definition
Sub Prime Mortgage
Pronunciation
/ˈsbraɪm ˈmɔrɡɪdʒ/
Part of Speech
Noun
Definition
A type of financial instrument that is extended to individuals or entities with poor or questionable credit, often with higher interest rates and stricter terms than traditional mortgages.
Examples
- The bank offered a sub prime mortgage to the couple with a credit score below 600.
- Sub prime mortgages were widely criticized for contributing to the 2008 financial crisis.
Synonyms
- Lien
- Debt
Antonyms
- Conventional mortgage
- Prime mortgage
Etymology
The term ‘sub prime’ originates from the phrase “sub-prime” which refers to the lower-grade or secondary credit instruments, usually denoted as ‘B’ or ‘C’ grade.
Usage Notes
When referring to a sub prime mortgage, it is essential to emphasize the context of the loan, including the borrower’s creditworthiness and the interest rate involved.
Cultural References
Sub prime mortgages have been prominently featured in popular culture, including films and novels that explore the 2008 financial crisis, such as The Big Short (2015) and The Wolf of Wall Street (2013).
Idiomatic Expressions or Phrases
Phrases such as “the sub prime crisis” or “the sub prime mortgage industry” have become synonymous with financial instability and poor lending practices.
Related Words or Phrases
Words and phrases closely related to sub prime mortgages include “mortgage-backed security,” “collateralized debt obligation,” and “credit rating.”
Collocations
Common word combinations with the term ‘sub prime mortgage’ include “sub prime lending,” “sub prime bubble,” and “sub prime foreclosure.”
Frequency of Use
While the term ‘sub prime mortgage’ was widely used in the early 2000s, its frequency of use has decreased since the 2008 financial crisis, as lenders became more cautious in extending credit to high-risk borrowers.
Common Misspellings
Common misspellings of the term ‘sub prime mortgage’ include “subprime mortgage” and “sub-prime mortgage.”