Finance
What is a 'portfolio loan' and why might Oregon buyers seek one?
AA loan using a stock portfolio as collateral
BA loan kept 'in house' by the originating lender (not sold on secondary market), allowing more flexible underwriting standards for non-conforming situations✓ Correct
CA loan specifically for real estate investment portfolios
DA government-backed loan for multiple properties
Explanation
Portfolio loans are kept on the lender's own books rather than sold to Fannie Mae, Freddie Mac, or the secondary market. Because the lender retains the risk, they can offer more flexible underwriting — useful for unique properties, self-employed borrowers, jumbo amounts, or borrowers who don't fit standard conforming guidelines.
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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.
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