Question 1

What happens when my rate adjusts?

Accepted Answer

Your rate changes based on an index plus a fixed margin. Most use SOFR or Treasury indexes. The adjustment caps limit how much your rate can increase at each change.

Question 2

Can I qualify with cryptocurrency assets?

Accepted Answer

Yes, some portfolio lenders now accept verified crypto holdings for income calculation and reserve requirements. Expect 40-50% haircut on the asset value for qualification purposes.

Question 3

How long is the fixed-rate period?

Accepted Answer

Most portfolio ARMs offer 3, 5, 7, or 10 year fixed periods. Longer fixed terms mean higher initial rates but more payment stability.

Question 4

Do portfolio ARMs have prepayment penalties?

Accepted Answer

Many carry 3-5 year prepayment penalties that decline over time. Some lenders waive penalties if you refi with them. Always negotiate this before you lock.

Question 5

Why would a lender keep this loan instead of selling it?

Accepted Answer

Portfolio lenders accept deals too unique for Fannie Mae or Freddie Mac standards. They price for the extra risk and earn ongoing interest income.

Portfolio ARMs for Portola Valley's High-Net-Worth Borrowers