Finance
What is a 'portfolio loan' and how might it benefit Hawaii buyers who don't qualify for conventional financing?
AA. A loan for purchasing a portfolio of investment properties
BB. A loan that a lender keeps (retains) in its own portfolio rather than selling to the secondary market, allowing more flexible underwriting criteria than conforming loans✓ Correct
CC. A loan backed by a portfolio of stocks and bonds as collateral
DD. A government-backed loan specifically for Hawaii residents
Explanation
Portfolio loans are held by the lender rather than sold to Fannie Mae/Freddie Mac. Because the lender keeps the loan risk, it can use more flexible criteria: higher DTI ratios, non-standard income documentation, properties not eligible for conforming loans (condotels, unique properties).
People Also Study
Related Hawaii Questions
- What is 'buy-down' mortgage financing and how might it benefit Hawaii buyers in a high-rate environment?Finance
- What is 'USDA Rural Development loan' and which Hawaii properties might qualify?Finance
- Hawaii's unique ecosystem makes which type of environmental disclosure particularly important for rural properties?Environmental
- A Hawaii agent sold 12 properties at an average price of $650,000 earning an average 2.5% commission per side. What was the agent's total annual commission income?Real Estate Math
- What is 'conforming loan limit' and why is it set higher in Hawaii?Finance
- What is 'bridge loan' financing and when might a Hawaii buyer use one?Finance
- A property in Honolulu has a tax rate of 3.5 mills per dollar of assessed value. The assessed value is $800,000. What is the annual property tax?Real Estate Math
- In Hawaii, a mechanic's lien may be filed by:Property Ownership
Key Terms to Know
Debt-to-Income Ratio (DTI)
A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Math Concepts
Study This Topic
Practice More Hawaii Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Hawaii Quiz →