Glossary Letter: S

A subprime loan is a type of loan offered to borrowers with lower credit scores or higher risk profiles, typically resulting in higher interest rates compared to prime loans. These loans are designed for individuals who may not qualify for standard loans due to credit issues or financial instability. While subprime loans provide access to… Continue reading Subprime Loan

A subordination agreement is a legal document that establishes the priority of liens or claims on a property, typically when multiple loans or liens exist. It allows a newer lien, like a second mortgage, to take a subordinate position to an existing lien, such as a first mortgage, altering the standard repayment hierarchy. This agreement… Continue reading Subordination Agreement

A secured loan is a type of loan that requires the borrower to provide collateral to back the loan. The collateral can be a property, vehicles, or other valuable assets. This collateral reduces the lender’s risk and often results in lower interest rates compared to unsecured loans. In the event of default, the lender can… Continue reading Secured Loan

An SBA Loan is a small business loan partially guaranteed by the U.S. Small Business Administration (SBA). It is designed to help small businesses access affordable financing. SBA loans typically offer lower interest rates, longer repayment terms, and lower down payments compared to conventional loans. They are often used for working capital, equipment purchases, or… Continue reading SBA Loan

A soft prepayment penalty is a fee in your mortgage contract that only triggers if you refinance your loan early, typically within the first few years. It allows you to sell your house without penalty since the new owner will pay off the remaining balance. This is in contrast to a hard prepayment penalty, which… Continue reading Soft Prepayment Penalty