Most mortgage loans are issued by large financial institutions. Those loans are then sold to other large institutions that service the conventional loan. This is the prime reason why many people have one lender that they make payments to when they first close on a loan and then find out within a few months who they will continue to make loan payments to.
However, mortgage portfolio loans are quite different. They are generally issued by small institutions, such as local credit unions or local lenders, that hold onto the loan for the duration of the loan. Many people wonder who can benefit from mortgage portfolio loans and why these types of loans are beneficial to them. Here are a few types of people who may want to consider this loan type.
1. Those With Credit Challenges
One of the types of people who may want to consider mortgage portfolio loans is someone with credit challenges. Perhaps you have bad credit due to late payments years ago or due to medical bills. A lender that issues mortgage portfolio loans is able to look at why your credit is bad instead of just looking at the score. They often can help those who have poor credit as long as their income is high enough.
2. Those Who May Want to Buy Rental or Vacation Homes
Another type of person why may want to consider mortgage portfolio loans is someone who is looking to buy rental or vacation homes. If you are looking to buy a home that you do not intend on living in, getting a conventional loan is extremely challenging. You often have to have more money down, have a higher credit score, and pay a higher interest rate. If you want to buy a second home without jumping through as many hoops, mortgage portfolio loans may be ideal.
3. Those Who Want to Buy Fixer-Uppers
If you want to buy a fixer-upper, maybe it's time to consider a mortgage portfolio loan. Conventional loans base the loan on the current value of the home. If a home needs a lot of work, you may need a loan that gives you money to do that work and pay for the home. Mortgage portfolio loans could give you that flexibility.
Conventional loans are ideal for someone looking to buy a home they intend on living in that does not need much or any work and for someone who has decent credit. Those who have credit challenges, are looking to buy homes they may not plan on living in, or want to fix up a home may need a loan that isn't conventional. Mortgage portfolio loans consider your individual circumstances rather than income, a credit score, and the value of a home to help get you into the right loan for the type of home you are looking to purchase.
If you think a mortgage portfolio loan would work for you, contact services such as Choice Mortgage.