SUBPRIME Meaning and
Definition
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Subprime refers to a category of loans or borrowers that have a higher risk of defaulting on their payment obligations compared to prime borrowers or loans. It is commonly used in the context of the housing market, but can also be applied to other lending sectors such as auto loans or credit cards.
In the mortgage industry, subprime loans are offered to individuals who have a less-than-ideal credit history, typically characterized by a low credit score, limited income, or a history of financial distress. These borrowers are considered to be less creditworthy, and as a result, they are charged higher interest rates to compensate for the increased risk. Subprime mortgages often come with features like adjustable interest rates and low initial payments, making them attractive to borrowers despite the risks involved.
The term "subprime" gained notoriety during the global financial crisis of 2008, as many subprime borrowers defaulted on their mortgages, leading to a collapse of the housing market and a subsequent recession. The crisis brought to light the potential dangers and instabilities associated with subprime lending, highlighting the need for stricter regulations and risk assessment in the financial industry.
Overall, subprime refers to loans or borrowers with higher default risk, typically due to their poor credit histories or financial instability. While these loans provide access to credit for individuals who may otherwise be excluded, they carry significant risks for both borrowers and lenders.
Common Misspellings for SUBPRIME
Etymology of SUBPRIME
The word "subprime" is derived from the combination of two words: "sub" and "prime".
The prefix "sub" comes from the Latin word "sub", meaning "under" or "below". It is commonly used to indicate something inferior, lesser, or lower than the standard.
The word "prime" comes from the Latin word "primus", meaning "first" or "foremost". In this context, it refers to the highest quality or the most desirable.
When these two words are combined, "subprime" refers to something that is below the standard or quality of prime, indicating that it is of lesser quality or is considered riskier. The term "subprime" is commonly used in the context of loans, mortgages, or financial products to describe borrowers who have a higher risk of default or are less creditworthy.
Idioms with the word SUBPRIME
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subprime, at subprime adjective
The idiom "subprime" refers to a financial or lending concept, particularly in the context of mortgage loans. It describes loans or borrowers who have a higher risk of defaulting on their payments due to factors such as low creditworthiness, a history of late payments, or insufficient income. "Subprime, at subprime adjective" suggests that something or someone is of lower quality or considered less desirable, often due to being associated with higher risk or lesser standards.
Similar spelling words for SUBPRIME
- supermex,
- superman,
- supermarket,
- superintend,
- superimpose,
- supernaw,
- supreme,
- supermodel,
- supermom,
- supremo,
- superinfect,
- supernal,
- supremely.
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