Subprime

  

Below prime. Like...substandard. Risky.

Usually referring to loans, but can also refer to equity investments, deal structures, and human beings. But not politicians; they exist with this classification by default.

See: Subprime Mortgage.

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Finance: What is a Mortgage?345 Views

00:00

Finance allah shmoop shmoop What is a mortgage Well people

00:07

a mortgage is just dead it's alone but one with

00:10

special tax treatment For most people simply put Any interest

00:15

you pay on a mortgage to buy a home is

00:18

tax deductible Morty morton's inputs down a hundred thousand bucks

00:25

to buy a home that costs four hundred big ones

00:29

his mortgages three hundred grand at five percent interest per

00:33

year So that's fifteen thousand dollars a year he pays

00:36

to rent the money from the bank which he uses

00:39

to buy his dream home with the loop de loop

00:42

waterslide Morty earns one hundred grand a year and pays

00:44

tax on his last fifteen thousand of earnings soas faras

00:48

The irs is concerned since morty can deduct his fifteen

00:52

thousand dollars in interest against his earnings he does not

00:56

in fact earn taxable wages of one hundred grand annually

01:00

Instead he earns taxable wages of eighty five thousand dollars

01:05

a year Essentially with government is doing is sharing in

01:08

some of the cost of renting the money Taub i'm

01:11

ortiz home well why would the u s government be

01:13

so charitable Well because home ownership has been integral part

01:17

of the american dream since the u s of a

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i po'ed in seventeen seventy six easy access to mortgages

01:25

and then home buying can be a hugely beneficial asset

01:29

In the vast majority of cases homes create family stability

01:32

a store of wealth and tax dollars for local schools

01:36

in the form of real estate taxes So don't feel

01:39

bad about splurging on that water slide there Morty Just 00:01:42.93 --> [endTime] remember you're doing it for the kids Hello

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