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Portfolio ARMs in San Diego
San Diego's coastal premium and investor activity create steady demand for non-agency financing. Portfolio ARMs serve borrowers who earn well but don't fit Fannie Mae boxes—business owners, real estate investors, and high-income professionals with complex tax returns.
These loans stay on a lender's balance sheet instead of getting sold to Fannie or Freddie. That means underwriters can approve scenarios conventional guidelines reject—like investment property cash flow or unconventional income sources.
Most portfolio ARM lenders want 20-30% down and credit scores above 680. But they'll look at bank statements, asset depletion, or rental income that conventional underwriting ignores.
The rate typically locks for 3, 5, or 7 years, then adjusts annually based on an index plus margin. Caps limit how much the rate can jump each adjustment period and over the loan's life.
Portfolio lenders range from regional banks to private institutions. Each sets their own risk appetite and pricing—there's no universal standard like FHA or conventional loans.
Rate spreads vary widely based on your scenario. A clean file with 30% down might price near agency rates. Add investment properties or recent self-employment and you'll pay 0.5-2% more. Shopping multiple portfolio lenders is critical.
I use portfolio ARMs for San Diego clients who need fast closings on investment properties or can't document W-2 income. The adjustable rate keeps initial payments lower than fixed portfolio products.
Watch the margin and caps closely—that's where portfolio lenders differ most. A low teaser rate means nothing if the margin is 4% and your first adjustment spikes the payment. I always run payment scenarios through the first two adjustments before recommending these loans.
If you qualify for a conventional ARM, take it—better rate, lower costs. Portfolio ARMs are for borrowers who don't fit agency boxes but still want lower initial payments than fixed non-QM products offer.
Compared to bank statement or DSCR loans with fixed rates, portfolio ARMs start 0.5-1% lower. The tradeoff is rate uncertainty after the fixed period. Makes sense if you're selling within 5-7 years or plan to refinance when your income documentation improves.
San Diego's investor market—beach rentals, military housing conversions, ADU builds—drives portfolio ARM volume. Lenders here see enough deal flow to keep competitive pricing on multi-property scenarios.
Coastal property values and strong rental demand give local portfolio lenders confidence. That translates to higher loan amounts and better terms than you'd find in softer markets. But expect lenders to scrutinize vacation rental income carefully given seasonal fluctuations.
Caps limit adjustments—typically 2% per adjustment and 5-6% over the loan life. Your first adjustment after the fixed period hits hardest if rates have climbed.
Yes, most borrowers refinance during the fixed period. No prepayment penalties are standard, but confirm before closing.
They can, but most borrowers use them for investment properties. If it's your primary home, a conventional ARM likely costs less.
Your payment increases based on the new rate. That's why we stress-test affordability at worst-case adjusted rates before approval.
Most allow 5-10 financed properties. They'll aggregate your rental income and existing debt to determine total capacity.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.