Question 1

What credit score do I need for a portfolio ARM in San Luis Obispo?

Accepted Answer

Most lenders require 680 minimum, though some accept 660 with larger down payments. Investment properties typically need 700+ credit.

Question 2

How do adjustment caps work on portfolio ARMs?

Accepted Answer

Common structures are 2/2/5 or 5/2/5. First number caps initial adjustment, second caps subsequent adjustments, third caps lifetime increase.

Question 3

Can I use bank statements instead of tax returns?

Accepted Answer

Yes, many portfolio ARM lenders accept 12-24 months of bank statements for self-employed borrowers. Approval depends on deposits and overall cash flow.

Question 4

Do portfolio ARMs work for vacation homes near SLO beaches?

Accepted Answer

Absolutely. Most lenders offer portfolio ARMs for second homes with 15-20% down. Expect slightly higher rates than primary residence pricing.

Question 5

What happens when my ARM adjusts after the fixed period?

Accepted Answer

Your rate adjusts based on an index plus margin, capped by adjustment limits. Most borrowers refinance before first adjustment hits.

Question 6

Are portfolio ARMs available for investment properties in San Luis Obispo?

Accepted Answer

Yes, with 25-30% down and 6-12 months reserves. Lenders focus on rental income and property cash flow more than personal income.

Portfolio ARMs in San Luis Obispo: Flexible Financing Beyond Conventional Limits