If you’re looking for a flexible home financing solution, portfolio loans may be the perfect option for you. A portfolio loan is a type of loan that is made by a lender and kept in-house rather than being sold to another institution. These loans are typically offered to borrowers who have non-traditional income sources, such as self-employed individuals or those with multiple sources of income. Other factors, like less-than-perfect credit or a high debt-to-income ratio, can be looked at and approved on an individual basis.
Here’s what you need to know about portfolio loans and how they can benefit you if do not match traditional lender requirements:
What is a portfolio loan?
A portfolio loan is a loan that is held by the lender rather than being sold to another institution. This means that the lender has more flexibility in the loan terms and can consider a wider range of factors when making the loan decision. Additionally, because the lender retains the loan, they have more control over the loan and can make decisions on a case-by-case basis.
Who can benefit from a portfolio loan?
Portfolio loans are often used by borrowers who don’t fit the traditional lending criteria for a mortgage loan. For example, self-employed individuals who have fluctuating income or those with multiple sources of income may find it difficult to qualify for a traditional loan. Portfolio loans offer more flexibility and can take these factors into consideration when making the loan decision.
What are the benefits of a portfolio loan?
One of the main benefits of a portfolio loan is flexibility. Because the lender holds the loan in-house, they have more control over the loan terms and can be more creative in their lending decisions. This can result in more favorable loan terms and better rates for the borrower.
Another benefit of a portfolio loan is that it can be a good option for borrowers who have unique financial situations. For example, if you have a low credit score or a high debt-to-income ratio, a portfolio loan may be a better option than a traditional loan. This is because the lender can take a more holistic view of your financial situation and may be willing to offer more favorable loan terms as a result.
How do I qualify for a portfolio loan?
The qualification requirements for a portfolio loan will vary depending on the lender. In general, you will need to provide documentation of your income and assets, as well as information about your credit history and employment history. Some lenders may also require a higher down payment or have other specific requirements.
If you’re interested in exploring portfolio loans as a financing option, it’s a good idea to speak with a lender who specializes in these types of loans, like Acadia Lending Group. We can walk you through the qualification requirements and help you determine if this type of loan is right for you.