An Alt-A mortgage, or Alternative A-paper mortgage, is a type of mortgage that is considered riskier than A-paper, or "prime", and less risky than "subprime," the riskiest type of mortgage. Therefore, Alt-A interest rates (determined by credit risk) usually rank between those of prime and subprime home loans.
Common characteristics of Alt-A mortgages are: borrowers with less than full documentation, lower credit scores, higher loan-to-values, and more investment properties. The term "A-minus" is related to Alt-A, with some lenders categorizing them as the same thing. The difference between them is that mortgage borrowers in an A-minus mortgage usually have FICO scores below 680, while an Alt-A mortgage is a loan lacking full documentation. Alt-A mortgages may have excellent credit but may not meet underwriting criteria for other reasons.
Search the Knowledgebase
Browse by Category
The article has been updated successfully.
