Question 1

How often do portfolio ARM rates adjust?

Accepted Answer

Most adjust annually after an initial fixed period of 3, 5, or 7 years. Each lender sets their own index and margin, so terms vary significantly between portfolio products.

Question 2

Can I refinance a portfolio ARM early?

Accepted Answer

Yes, but check for prepayment penalties. Some lenders charge fees if you refinance within the first 2-3 years, while others allow penalty-free payoffs.

Question 3

Do portfolio lenders approve properties agencies reject?

Accepted Answer

Often yes. Lenders holding loans in-house underwrite properties agencies won't touch—rural land, major fixers, unique builds, and properties with title complications.

Question 4

What happens when the rate adjusts?

Accepted Answer

Your payment changes based on the index plus the lender's margin. Adjustment caps limit how much the rate can increase per year and over the loan's life.

Question 5

Are portfolio ARMs harder to qualify for than conventional?

Accepted Answer

Not necessarily harder—just different. Lenders review your full financial picture and property strength rather than strict agency debt ratios and credit minimums.

Portfolio ARMs in Chico: Flexible Financing Beyond Agency Guidelines