Portfolio Loans With Territorial Savings Bank
Territorial Savings Bank offers a variety of mortgage products and services in Hawaii. In some cases where a conforming loan may not satisfy your client’s mortgage situation or your client’s loan exceed its limits, Portfolio Loans be a great alternative.
| What are Portfolio Loans? |
Portfolio Loans (a non-conforming loan) are mortgage loans that are made by financial institutions. These types of mortgage loans are unlike conforming loans, which are sold in the secondary market to either Fannie Mae, Freddie Mac, FHA or VA. However, Portfolio Loans could be securitized and sold to the Agencies in the future.
| How do Portfolio Loans work? |
Portfolio Loans are generally funded by deposits at the financial institution. The loans can be based on conforming loan limits as prescribed by the Agencies or, more commonly, jumbo loans which are above the maximum loan limits of the agencies. A benefit of a Portfolio Loan is that there may not be fee adders as may be charged on conforming loans. It is a viable alternative for loans that do not meet Agency requirements.
| What are some situations in which a Portfolio Loan is a good option? |
- Situations that involve property issues whereby the collateral may not meet agency requirements
- Example: Condominium project with outstanding litigation: The agencies may not allow or may limit financing in the project but, a Lender with the capability to do portfolio loans may be able to finance units in the project
- If your client would like to have their loan serviced locally.
- If your client’s loan does not fit within the limits of a conforming loan
- If your client would like to have multiple properties on a single loan
| What are some Portfolio Loan costs? Are there any up-front costs? |
Generally speaking, pricing on Portfolio Loans could be slightly higher that of agency pricing (such as Fannie Mae or Freddie Mac). However, some Portfolio Products may not have the “risk based adders (fees)” that agency loans do, so it would be prudent to look closely at the rates and points. That being said, a Portfolio Loan is a very viable financing alternative that is competitively priced and provides borrowers with another option to finance their purchase or refinance.
| What are the Portfolio Loan requirements? |
Requirements may vary from Lender to Lender, however, most will align with the underwriting requirements as prescribed by the Agencies. Prudent credit, income and risk mitigation underwriting still pertain in qualifying the Borrower(s) and in evaluating the collateral.
| How do I get started? |
Our Territorial Savings Bank loan officers and Branch Managers can answer any questions your client may have and help your client start the process.
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