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Updated over 9 years ago on . Most recent reply

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Matt Powell
  • Catonsville, MD
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Do portfolio lenders' terms vary by deal?

Matt Powell
  • Catonsville, MD
Posted

Hi all. I'm hoping to use a portfolio lender to finance my first flip. If I find that BankA offers residential rehab portfolio loans, will their terms depend on their confidence in the deal, to include my experience and the quality of the proposal? Or is it more like, BankA offers a product and it's always structured a certain way, has a certain interest rate, duration, etc?

Thanks!

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J Scott
  • Investor
  • Sarasota, FL
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J Scott
  • Investor
  • Sarasota, FL
ModeratorReplied
Originally posted by @Chris Martin:

BoA isn't what I'd call a "portfolio lender".

 I think he just means any random portfolio lender (i.e, "Bank A" versus "Bank B")...I was confused about that at first as well...  :-)

To answer the OP's question...  In general, most portfolio lenders will have a standard product (specific requirements, specific downpayment amount, specific rate/terms, etc).  And that product will be relatively similar between most portfolio lenders, in my experience.  That said, if you have a unique situation, it's very possible that the lender will be willing (or require themselves) to tailor the loans to you specifically. 

For example, if you have a lot of cash reserves, they may not be as strict on the income requirements.  Or, if you don't have any experience, they may do the deal with a slightly larger downpayment.

The whole point of a portfolio lender is that they have the authority to make their own underwriting guidelines and create their own loan products, and sometimes they'll go "off script" if the deal/investor warrants it.

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