Question 1

What is a Portfolio ARM exactly?

Accepted Answer

It's an adjustable-rate mortgage a lender keeps on its own books. Because it's not sold off, the lender can set flexible terms standard loans don't allow.

Question 2

How long does the initial rate last?

Accepted Answer

Common structures are 5/1, 7/1, and 10/1. The first number is the fixed-rate years before the rate starts adjusting annually.

Question 3

Do Portfolio ARMs work for self-employed borrowers in Los Altos?

Accepted Answer

Yes — that's one of their strongest use cases. Portfolio lenders can accept bank statements or asset depletion instead of tax returns.

Question 4

What credit score do I need for a Portfolio ARM?

Accepted Answer

Most portfolio lenders want 700 or higher for Los Altos loan sizes. Some go lower with strong compensating factors like large reserves.

Question 5

Are rates higher than conventional loans?

Accepted Answer

Initial rates can be competitive — sometimes lower than a 30-year fixed. Rates vary by borrower profile and market conditions.

Question 6

Can I refinance out of a Portfolio ARM later?

Accepted Answer

Yes. Many borrowers use the ARM for the fixed period, then refinance before the first adjustment. Prepayment terms vary by lender.

Portfolio ARMs in Los Altos: Flexible Financing for High-Value Homes