Subprime loans can be risky mortgages in the wrong hands, but you can learn to live with them.

Education is the key.

Subprime mortgages are home loans that provide a home financing option for those who don't qualify for more conventional prime mortgages. Subprime loans typically are more expensive than prime loans, and they carry more risk.

But that's what makes education critical -- before you sign on the dotted line -- according to NeighborWorks America.

NeighborWorks America is a nonprofit organization that delivers financial aid and training to troubled urban communities.

A NeighborWorks-backed loan program serves 3,000 customers from subprime demographic groups. Yet it has a loan success rate that's nearly on par with the loan success rate for prime mortgages nationwide.

As of June 30, only 3.3 percent of Neighbor work's borrowers were 30 days or more delinquent on their home loans. That's only slightly higher than the 2.6 percent delinquency rate, nationwide, for PRIME mortgages tracked by the Mortgage Bankers Association.

And, when compared with subprime loans nationwide, NeighborWorks loans really outperform. NeighborWorks' 3.3 percent delinquency rate is far below the more than 14 percent national delinquency rate for subprime loans.

How is that possible?

Education. Not just cursory class on home ownership before you buy, but continuing education that spans the duration of home ownership.

NeighborWorks' home owners learn home ownership readiness; budgeting and credit; mortgage finance; home shopping; home maintenance, even community involvement.

As a result, more NeighborWorks home owners remain home owners -- even through tough times.

Published: December 4, 2007

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.