What Is a Portfolio Loan?

Who Qualifies for a Portfolio Loan?

Since portfolio loans are customizable, they can serve a wide range of borrowers, from first-time homebuyers to experienced real estate investors.

They are especially helpful for those with unique financial circumstances. While portfolio loans are not a credit free-for-all, they give lenders more flexibility since they hold the loan and assume the risk.

This allows for creative underwriting solutions that traditional lenders often cannot accommodate.

Who it’s for:

• Borrowers who do not meet traditional mortgage requirements

• Individuals purchasing properties that fall outside conventional loan limits

• Real estate investors with unique properties or non-traditional income sources

What’s the Benefit of a Portfolio Loan?

A portfolio loan gives borrowers the freedom to work with lenders who can design loan terms around their individual goals.

Lenders can take a more personalized approach, helping borrowers secure financing even when their circumstances do not fit within traditional mortgage standards.

Here’s a closer look at the key benefits of portfolio loans:

Higher Loan Limits for Luxury or High-Value Properties

Portfolio loans make it easier to finance homes that exceed conforming loan limits, which is especially helpful in high-cost markets where property prices often reach seven figures.

These loans typically fall into the jumbo or super jumbo category. A jumbo loan exceeds the standard conforming loan limit, while a super jumbo loan generally applies to mortgages over $3 million.

Axos Bank’s portfolio program accommodates loan amounts ranging from $500,000 to $30M+, offering flexibility for luxury homebuyers and real estate investors who need larger financing options.

Flexible Qualification Options for Complex Financial Situations

If a conventional lender has told you that you do not qualify for a mortgage, it may still be worth reaching out to a portfolio lender.

Portfolio lenders can take a more flexible approach to underwriting and documentation, making it easier to qualify if your finances do not fit traditional lending standards.

For example, Axos Bank’s portfolio loan program allows for:

• Bank statement income documentation for borrowers with fluctuating or self-employed income.

• Cross collateralization, increase your buying power with the help of your existing property value.

• Asset depletion, which uses liquid assets (including cryptocurrency) to demonstrate the ability to cover monthly expenses without requiring payment from those assets.

Eliminate Selling Contingencies

In a competitive real estate market, selling contingencies can make it harder to stand out as a buyer.

A portfolio loan can help you avoid the sell-before-you-buy dilemma through a flexible option known as a bridge loan.

Bridge financing provides short-term funds to cover your down payment or pay off your existing mortgage, allowing you to purchase a new home while your current property is still on the market.

Maximize Cash Flow

If you want to avoid tying up your assets in a large home purchase, a portfolio loan can help reduce your upfront costs and preserve liquidity.

Axos Bank offers no-money-down programs that use cross-collateralization of a free-and-clear property.

The bank also provides asset-based lending, which allows borrowers to pledge assets such as stocks or bonds in place of a larger down payment.

Borrowers can also explore interest-only loan options, which offer lower monthly payments during the initial years of the loan to help maintain flexibility and free up cash flow.

Minimize Liability and Maintain Privacy

Portfolio loans can help protect your privacy while reducing personal liability.

Some lenders, including Axos Bank, allow borrowers to vest property titles in entities such as trusts, LLCs, S corporations, or partnerships.

This structure can provide an extra layer of protection, especially for those purchasing investment properties.

Borrowers may also explore Privacy Mortgages, which are designed for individuals such as actors, athletes, public officials, and others who prefer to keep their home address and ownership details out of public records associated with traditional mortgage filings.

Is a Portfolio Loan Right for You?

Portfolio loans are not just for luxury homebuyers. They can also help self-employed borrowers, non-resident aliens, and others who may not qualify for traditional mortgage programs to secure the financing they need.

Ready to explore your options? Visit our Portfolio Loan page to learn more.

If you have questions, contact our mortgage team. They specialize in jumbo financing and offer a wide range of mortgage solutions to support the purchase or refinance of a primary home, second home, or investment property.