If you are like me, you desperately want to buy a house and know that you are not independently wealthy. For people like us, two words scare the living daylights out of us: subprime mortgage. After what happened in the US housing market, these two words are almost taboo for realtors and banks. So, I want to explain what a subprime mortgage is in real terms, because a bank won’t hand you a document entitled ‘an unaffordable deal’. A subprime mortgage is an adjustable rate mortgage that is structured as a bait-and-switch scheme. Basically, the person attempting to sell you a home is under a lot of pressure to sell the home, and will try to create small time pressures to ‘close the deal’. In a high demand housing area like downtown Vancouver, the time pressure will come from other buyers who could buy it before you. But, in markets that aren’t as good, the time pressure is going to come from bank discount terms. Banks offering the mortgages will run special deals that will ‘save you money’ in the first year of your mortgage, but only if you act within a certain period of time. If you hear this, you should already be skeptical.