Question 1

What makes a Portfolio ARM different from a regular ARM?

Accepted Answer

The lender keeps the loan instead of selling it. That gives them flexibility to approve deals and set terms that agency lenders won't touch.

Question 2

How long does the initial rate stay fixed?

Accepted Answer

Most Portfolio ARMs fix the rate for 3, 5, 7, or 10 years. After that, the rate adjusts annually based on an index plus a margin.

Question 3

Can I use a Portfolio ARM to buy a vacation rental in Capitola?

Accepted Answer

Yes. Portfolio lenders often finance short-term rentals and non-warrantable properties that Fannie Mae and Freddie Mac won't approve.

Question 4

Do I need to show tax returns to qualify?

Accepted Answer

Not always. Some portfolio lenders qualify borrowers on bank statements, assets, or rental income instead of tax returns.

Question 5

What happens when the ARM adjusts after the fixed period?

Accepted Answer

Rate caps limit how much your rate can move at each adjustment and over the loan's life. Review those caps before you sign.

Portfolio ARMs in Capitola, CA — Flexible Financing for a Coastal Market