Which type of loan is primarily dependent on the borrower's creditworthiness and typically has higher interest rates?

The answer is B, Subprime Mortgage, as this type of loan is specifically designed for borrowers with lower credit scores or limited credit histories, which makes them a higher risk for lenders. Because of this increased risk, subprime mortgages typically come with higher interest rates compared to other loan options that borrowers with better credit profiles might qualify for.

In the case of conventional loans, although they can vary in terms and rates, they are not tailored specifically for borrowers with poor credit and usually reflect more stable rate structures based on the borrower's creditworthiness. FHA loans are backed by the Federal Housing Administration and are intended to help individuals with lower credit scores access home financing, typically offering better interest rates than subprime mortgages. VA loans, guaranteed by the U.S. Department of Veterans Affairs, are also advantageous, often offering favorable rates and terms regardless of credit history, as they aim to support veterans and active service members.