Portfolio Loans | SouthStar Bank
What is a portfolio loan?
A SouthStar Bank portfolio loan is originated and funded right here at our institution, and never moves into the secondary mortgage market. It’s called a “portfolio loan” because it’s always going to stay in our portfolio. That means we can rely on our relationship with the customer to determine loan eligibility even if they don’t meet the typical mortgage profile.
For example, meet Annie. Annie is a freelance marketing consultant with variable income. Her credit score has taken a few hits but we’ve known Annie for years. She’s been a customer in good standing and a part of our community for a long time. Her business is picking up, and she’s starting to get back on her feet. Purchasing a home could improve her stability, her credit, and her children’s lives. She may even want to purchase a four-plex, so she can start earning some rental income on the other three units.
Annie comes to SouthStar Bank and meets with one of our loan officers to discuss the Star Advantage Loan. We look at her plans, her property, and total financial picture and make a decision about whether she’ll be a good risk. If we agree the loan makes good business sense, we move forward, even though she would not have been eligible for a loan through Fannie Mae and Freddie Mac.
Are portfolio loans a good idea?
A portfolio loan generally isn’t riskier for the consumer than any other kind of mortgage. It is riskier for the banker, which means it can come with higher interest rates and fees. Whether they are a good idea for you depends on your unique situation and goals.
Would you be able to qualify for a conventional mortgage with just a little more work and time? Do you have aspirations towards becoming a landlord or real estate investor? Are you trying to purchase a non-traditional property or unique property?
Of course you should carefully consider the total picture before you make your final decision. Our loan officers are happy to discuss the risks and benefits of a portfolio loan in your specific case.
How do you qualify for a portfolio loan?
Applying for a portfolio loan isn’t just about forms and numbers. It’s about your story. Be prepared to sit down and discuss yours. Tell us what your assets are, what you hope to accomplish, what’s behind, and what’s ahead. Be thorough and be transparent, even if you think parts of your situation might create an issue. We might be willing to work with you anyway, or we might be able to walk you through specific steps you can take to address areas of concern.
What are some common uses for a portfolio loan?
Many of our customers have used portfolio loans to:
- Purchase a residence after a bankruptcy, short sale, foreclosure, or divorce.
- Purchase a residence while self-employed.
- Purchase a residence as a foreign national.
- Purchase a rental property or a fix-and-flip property.
If any of these scenarios matches your situation, reach out to a SouthStar bank location near you to meet with one of our loan officers today.