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What is sub-prime rate of interest?

In: Foreclosure [Edit categories]

Answer:

It is one kind of interest rate lower than the market interest rate for a target group. This type of interest rate was used in USA house mortgage loan to capture all the lower income people. This is the one significant cause of present economic crisis.

First answer by ID3265790738. Last edit by ID3496626647. Question popularity: 2 [recommend question].

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Relevant answers:

How are prime interest rates determined?
The Federal Funds Rate, which is the interest rate banks charge each other, is determined eight times a year by the Federal Open Market Committee (FOMC). The prime interest rate usually runs about 3%...
Prime interest rate falls when?
when banks have more liquidity in their net. every bank have have to reduce their lending rates in order to attracting their credit-worthy customers
How does your bank know the prime interest rate?
Your bank will know the prime interest rate (also known as the "United States Prime rate" in the same manner that it becomes known to other banks. The rate is determined by the Wall Street Journal...
Why sub-prime crisis is called as Sub-prime?
It is called "sub-rime" because the holding of sub-prime (low credit quality) debt precipitated the crisis.
What are sub primes?
Sub prime can be used in two aspects 1. Sub prime customer - A customer who does not have a great credit history and does not have the income to pay the monthly mortgage payments on the loan he is...