Portfolio loans are loans which lenders choose to keep their balance sheet rather than sell on the secondary mortgage market. There are different reasons why a lender may decide to keep a loan in its portfolio. First, it may be that the loan doesn’t meet the standard set out by the two largest buyers of mortgages (Freedie Mac and Fannie Mae).
Getting A Portfolio Loan?
If you’re looking for a loan amount that exceeds the conforming loans, then you stand a chance at getting a portfolio loan. Los Angeles mortgage broker local office also provides the best type of loan for individuals who don’t fit the typical homebuyer mold. Here are a few examples.
High Debt-To-Income-Ratio or High Down Payment: if your debt to income ratio is more than what is allowed by conforming loans, but you still can make a large down payment then a portfolio loan can be a great option. A portfolio loan can also be underwritten to the standards best suited for the lender. For instance, if a borrower has a lot of assets, the lender may choose to overlook other areas of application and award the loan.
No Credit Score, Good Income and Asset: A foreign national whose primary residence is not in the United States may have the capacity to buy a home but can’t satisfy the documentation and residency requirements set out by most mortgage broker office programs. If such a borrower can show stable employment and make a healthy down payment, it’s possible for them to get a portfolio loan.
Self Employed: Most of the people whore self-employed will go to greater lengths to minimize their taxable income and claim every allowable deduction. While this may seem like a great tax strategy, it can leave them looking poorer on paper. A portfolio lender may choose to look at bank statements and overlook tax returns when evaluating the borrower’s income and cash flow.
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