A convincing record of credit puts a borrower in advantageous position while applying for a loan. But for the persons with troublesome credit record, to qualify for a loan is not an easy task. But persons with poor credit history also need loan. Subprime mortgage loan is designed for them. In fact, this kind of loan is garnering popularity at a very fast pace. As the risk factor is high, therefore, the interest rate is evidently higher.
The obvious advantage of providing such type of loan is expanding the credit market. So overall impact of subprime mortgage is very bright but there is also some eyebrow-raising issues disguised in the façade of this positive aspect of such loan. Increasing no. of foreclosures is often linked to such kind of loan. More precisely, tactics taken up by the lenders in times of providing such loans are often blamed for surging in the no. of foreclosures.