What are the disadvantages of subprime home loans?

[jeremy]

I'm getting ready to buy my house. I know to do a 30-yr fixed rate. I'm just wondering what is the buzz about subprime home loans?

It seems to really be hurting people and mortgage companies. What are the advantages and disadvantages?

[MichaelG]

Subprime loans are given to people with poor credit or no credit. They are very high risk for banks. To justify higher risk loans banks charge higher interest rates. They will lure people in with a low initial rate that will escalate after a certain time period.