our portfolio lender suggested a 3/1 ARM...thoughts?

5 Replies

My husband just got off the phone with our portfolio lender. He (the husband) texts me this: "they want us to do a 3/1 ARM w/ 20% down. And they will let us use rental income." The good thing about this is that we don't have 2 years landlording experience under our belts yet and we're looking at multifamily units (with renters already in leases), so this expands our borrowing potential. Actually, I'm not even sure there's a huge down side except that 20% can turn out to be a heck of a lot of money when you're just starting out.

I'm not terribly worried about the ARM as I'm sure we'd just refi at the point it kicks in. This is, however, my first time working with a portfolio lender, so I have no idea if what they're offering is a good deal.

Thoughts please! :-)

Stacey, Tacoma, WA

Hey Stacy! Who is your portfolio lender and where is your property? I am looking for a local one.

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Hey Stacey! Yeah, we would need to know the interest rate that is being offered, any additional points they are requiring, and if you are planning on holding the property long term, personally I would want to try and lock in the historically low rates we are currently at, however, if you are purchasing to reno and sell, then the ARM doesn't look too bad. Just my two cents!

P.S.  I will be reaching out to you guys soon, thinking maybe 8/2 ?  Have a great one!

I'm using a portfolio lender in FL that is offering a 7/1 ARM at 5% with 25% down.