The increased credit risk results in a higher interest rate than those paid by borrowers with a better credit history. A fee that can be charged as part of the loan. Each point is equal to 1 percent of the loan amount.
Conventional borrowers can pay points to help lower the interest rate.
An independent real estate financing professional who specializes in generating home or commercial mortgages. The fee a broker charges to help borrowers get a loan. In many subprime loans, the fee is 10 percent of the loan. An insurance policy often sold to subprime borrowers and financed in the loan. The insurance is used if the borrower dies, becomes disabled or unemployed.