PORTFOLIO MORTGAGE LENDERS
If you are having trouble getting pre approved for a Florida mortgage someone may recommend that you contact "a Florida Portfolio Mortgage Lender," and wonder what it is? In many cases, when a Florida mortgage applicant who does not qualify for a conventional loan program that fits Fannie Mae, Freddie Mac or even FHA, they are told they need to seek out a Florida portfolio mortgage lender.
Simply defined, a portfolio Florida mortgage lender is a bank or other Florida lending institution that makes mortgage loans that it does not intent to sell to the secondary market. Florida portfolio mortgage lenders hold these loans in their investment portfolio and do not sell the loan. As a result Portfolio Florida mortgage lenders can often approved borrowers offering greater flexibility when other Florida mortgage lenders decline their loan application. Florida mortgage lenders that portfolio their own loans can make their own underwriting decision based on their own qualifying criteria and are not concerned with selling these Florida mortgage loans to fit another lenders approval standards.
Portfolio Florida mortgage lenders are not garbage cans. These Florida mortgage lenders do not accept every Florida mortgage request. In today's Florida mortgage market every Portfolio mortgage lender has their own specific mortgage qualifying criteria. We have access to many Florida portfolio mortgage lenders that provide No credit Florida mortgage loans and bad credit Florida mortgage loans to FHA purchase, FHA refinance or other Florida mortgage programs for those that fit the lenders specific criteria. We suggest you apply today to see if you meet our Florida portfolio mortgage lenders criteria.
Today, portfolio Florida mortgage lenders might be a small community bank that many are unaware of. These small Florida portfolio mortgage lenders are often privately held and have more discretion in the way they approve or decline Florida mortgage applications than the larger stockholder driven Florida mortgage lenders. Depending on the demand of the Florida portfolio lenders mortgage programs these mortgage lenders can sometimes make loan underwriting decisions based more quickly. For example, Florida bad credit mortgage applicants may find that their current long term banking relationship might influence a positive loan decision from a portfolio mortgage lender.
To fully understand the concept of a Florida portfolio lender it is first useful to understand the alternative portfolio lending.You might ask: How can a Florida mortgage lender sell a mortgage? Why would a bank make a mortgage loan, and then sell it? Who would buy a Florida mortgage, and why?
The reason is that mortgage loans are considered investments. For true portfolio Florida mortgage lenders, mortgage loans are also investments in their customers and their investments in there anticipated returns on investment, the interest paid over the life of the loan, and degrees of risk and the possibility that the interest and or the principal will not be repaid.
Like other Florida real estate investments, Florida mortgage investing has its own potential risks and rewards that can be sold or purchased by another investor. To offer a mortgage investors sufficient return on investment on a mortgage that was made at market interest rates, the Florida mortgage originator may have to sell the mortgage loan at a discount. Or, to offer a secondary market investor a hedge against extra risk, the originator may have to make riskier loans at rates well above market rates.
Banks and other Florida mortgage lenders are investors that allocate a percentage of their total assets to Florida mortgage loans in order maintain a balanced portfolio. At any given time, they feel they have too great of a percentage of assets invested in Florida mortgages and decide to sell some loans to other investors.
Many Florida mortgage lenders use the funds received from selling Florida mortgage loans to replenish their funds in order to make more Florida home loans. On the other hand, a lender may want to add to its overall percentage of Florida mortgage loans and then hold them in its investment portfolio in order to realize the full value of the investment. Some Florida portfolio mortgage lenders hold mortgages that it funds in their own portfolio because it is important to build a solid, long-term customer relationships through the process of servicing the mortgage over the years.
To understand the value to consumers of working with a portfolio Florida mortgage lender, it is helpful to look at the investors who buy the Florida mortgage loans originated by others. Florida mortgage investors who buy mortgages make up what is known as the secondary mortgage market. For residential mortgages, the largest investors in Florida mortgage loans are two government owned institutions: (FHMA) Federal National Mortgage Association (popularly known as Fannie Mae) and the Federal Home Loan Mortgage Corporation (popularly known as Freddie Mac,). There are several other private secondary mortgage purchasing institutions.
These secondary market organizations purchase large numbers of loans from banks and other Florida mortgage originators and then re-package the loans in groups of similar type loans to be sold again as what are known as mortgage backed securities. These mortgage backed securities are traded like stocks and bonds.
Because these institutions buy so many mortgage loans from original Florida mortgage lenders, and because they desire to limit risk for buyers of their mortgage-backed securities, Fannie Mae and Freddie Mac have developed market standard guidelines for the loans they will be willing to buy. The guidelines include such particulars as the percentage of total income that is allowable for a borrower to spend on the total housing obligation including mortgage payments, taxes, insurance, HOA and total debt service, maximum loan amounts, down payment sources, and other particulars. Florida mortgage Lenders that wish to sell Florida mortgage loans to Fannie Mae and Freddie Mac must make loans that conform to these strictly enforced underwriting guidelines.
These secondary Florida mortgage guidelines may prevent Florida lenders for approval loans to homebuyers that do not meet the specific criteria. This is where a Florida portfolio mortgage lender can help. Portfolio mortgage lenders cannot be reckless in granting loans or they could go out of business very quickly. But they can and will go somewhat beyond the traditional lending guidelines if they can justify good reason.
By understanding Florida portfolio mortgage lenders, Florida home buyers will have a better understanding of how the Florida mortgage process works.