Question 1

How do Portfolio ARM rates compare to conventional ARMs in Mission Viejo?

Accepted Answer

Expect 0.5-1.5% higher than agency ARMs. The spread reflects lender risk since they hold the loan. Rates vary by borrower profile and market conditions.

Question 2

What income documentation do Portfolio ARM lenders accept?

Accepted Answer

Bank statements, 1099s, asset depletion, foreign income, and non-traditional sources. Each lender has different requirements—some want 12 months of statements, others need 24.

Question 3

Can I use a Portfolio ARM for a Mission Viejo investment property?

Accepted Answer

Yes, but expect 25-30% down and higher rates. DSCR Loans often make more sense for pure investment plays since they skip personal income verification entirely.

Question 4

How often do Portfolio ARMs adjust after the initial fixed period?

Accepted Answer

Most adjust annually after the fixed period ends. Initial fixed periods typically run 3, 5, 7, or 10 years depending on the lender and your preference.

Question 5

What credit score do I need for a Portfolio ARM in Orange County?

Accepted Answer

Most lenders want 680 minimum. Some go to 660 with compensating factors like larger down payments or significant liquid reserves.

Question 6

Do Portfolio ARM lenders require reserves for Mission Viejo homes?

Accepted Answer

Yes, typically 6-12 months of mortgage payments in liquid assets. Investment properties may require 12-18 months depending on the lender and property count.

Portfolio ARMs in Mission Viejo: Flexible Financing Beyond Agency Guidelines