Definition of Subprime Mortgage Explained

There is no official definition of what makes a loan subprime or not. One key factor in determining what kind of loan a borrower gets is his or her credit score. Credit scores can run from 300 to 850, and many involved in the business view a credit score of 620 as a historic rough dividing line between borrowers who are unlikely to qualify for a conventional, or prime loan, and those who may be able to. But there is no hard and fast cut off; many people with higher credit scores take subprime loans. In addition, not all adjustable-rate mortgages are subprime.