Using a Portfolio Loan to Buy a Property
If you are interested in investing in a property, but are concerned that you may not be able to meet the standard mortgage eligibility requirements or if you require a loan that exceeds traditional conforming loan limits, you may want to consider a portfolio loan. Portfolio loans provide financing for borrowers who are not typically able to get approval for a regular mortgage. If you are interested in better understanding your home financing options in Conyers, Georgia, the experts at Preferred Capital Funding can help. This blog will help you learn more about purchasing a property using a portfolio loan.
How Do Portfolio Loans Work?
In the traditional mortgage process, a lender sells your debt to a third party such as Freddie Mac or Fannie Mae rather than keeping it in order to be able to lend money to other borrowers. These mortgage types must meet specific guidelines so that they can be sold off, but in certain cases, mortgages are not aligned with these guidelines. In this situation, the loan becomes known as a portfolio loan, and since the debt isn’t sold off, it becomes part of the lender’s portfolio.
Portfolio loans are intended to help borrowers who normally may not be able to meet eligibility requirements qualify for home financing, and they’re usually offered by smaller credit unions or banks rather than larger, corporate financial institutions. They can help borrowers who may have a lower credit score, who are self-employed, or who may have had a previous bankruptcy or foreclosure own a home. Because portfolio loans have alternative eligibility requirements, lenders may require bank statements to verify income rather than a borrower’s tax information.
The Benefits of Obtaining a Portfolio Loan
Although portfolio loans may not suit certain borrowers, they do offer several advantages for others. One primary benefit of a portfolio loan is that the application requirements are not as strict as a traditional loan because lenders set their own guidelines that do not have to adhere to conforming loan standards. This aids borrowers who may struggle to qualify for a traditional home loan to finance a property. Portfolio loans also do not require private mortgage insurance, which can save a borrower a significant amount of money over time. Additionally, with a portfolio loan, you are more likely to have a closer relationship with your loan officer because you will be working with them throughout the life of the mortgage, which could prove to be beneficial if any issues arise during the loan term.
Get Help Financing Your Property with a Portfolio Loan
If you are ready to purchase a home in Conyers, Georgia, and have unique borrowing needs, you may want to consider a portfolio loan. Contact Preferred Capital Funding today for a consultation.
