Question 1

What makes a portfolio ARM different from a regular ARM?

Accepted Answer

The lender keeps the loan instead of selling it. That means they set their own guidelines — no Fannie Mae or Freddie Mac rules.

Question 2

Can self-employed borrowers use a portfolio ARM in Merced?

Accepted Answer

Yes. Most portfolio lenders accept bank statements instead of tax returns. That's a major advantage for self-employed buyers.

Question 3

How long is the initial fixed period on a portfolio ARM?

Accepted Answer

It varies by lender. Common structures are 3/1, 5/1, or 7/1 — fixed for the first 3, 5, or 7 years, then adjusting annually.

Question 4

Is a portfolio ARM a good fit for Merced rental property buyers?

Accepted Answer

Often yes. If you plan to hold 5 years or less, the lower initial rate saves real money versus a 30-year fixed.

Question 5

What credit score do I need for a portfolio ARM?

Accepted Answer

Most lenders start at 620. Strong reserves or a larger down payment can help if your score is lower.

Question 6

Do portfolio ARMs have prepayment penalties?

Accepted Answer

Some do. Always ask upfront — penalties vary by lender and can impact your exit strategy if you sell or refi early.

Portfolio ARMs in Merced, CA — Flexible Rates, Fewer Rules