Portfolio Loans

This page will tell you everything you want to know about portfolio loans. 

A Portfolio loan is not a specific loan program, but represents a broader range of loans that are underwritten by individual lenders to meet a specific lending need.

Portfolio loans are not sub-prime or hard money loans.  These mortgages cover a wide range of credit grades and offer solutions for many out of the box challenges that borrowers can encounter.

Portfolio Loan Highlights

More Options

Portfolio Loans offer a wide range of unique solutions

Short Term Solutions

Great for shortening waiting periods after hardship

Flexible Costs

Costs will vary based on credit profile and needs

Experience With Portfolio Loans

Portfolio lenders specialize in solutions that fall outside of traditional underwriting guidelines.

While it is true that portfolio loans can cost more than a traditional loan, the math usually makes sense when compared to not owning real estate.

An mortgage professional experienced with out of the box solutions can overcome a wide range of waiting period, income and credit score hurdles that would prevent you from using a traditional mortgage. 

If you are falling just short of qualifying, it doesn't hurt to explore one of these creative options.  An experienced loan officer will be able to identify what potential solutions might be available to you based on your specific scenario.

Scott Schang
Founder, FMWH

FAQ's About Portfolio Loan Solutions

Is there any way around the waiting period after a hardship?

Yes! Reduced waiting periods after a bankruptcy, foreclosure, short sale or deed in lieu is a common reason why folks inquire about portfolio loan options.

Portfolio lenders offer mortgages as soon as one day out of a financial hardship.  If you're trying to use a portfolio loan to shorten your waiting period, expect higher interest rates, and a larger down payment than traditional financing.

Are portfolio loans more expensive than traditional financing?

A portfolio loan is not automatically more expensive than traditional financing.  Mortgage insurance is not available for portfolio loans, so if you have less than 2o% equity in your home, a higher interest rate will reflect the higher risk.

The biggest difference between a traditional mortgage and a portfolio loan is the way that the lender and loan officer is paid.  Traditional lenders pay loan officers through the interest rates that they charge.

Portfolio loan interest rates do not typically include compensation to the lender or loan officer.  It is common for there to be origination fees as part of your closing costs.

Is a portfolio loan better than a Jumbo mortgage?

Jumbo mortgages are portfolio loans by definition.  The best interest rates on Jumbo mortgages can be found from depository banks.  These same depository banks are also the most strict in terms of loan to value, debt to income, and reserves.

A portfolio loan is a great option if you need higher debt to income ratios, lower down payment, or less reserves than would be required by a more conservative Jumbo underwriter.

Most Popular Portfolio Loan Articles