What’s A “Portfolio” Lender?
Mortgage loans are available from a variety of sources, including banks, S&Ls, mortgage brokers, mortgage bankers, credit unions, etc.
In many cases, those we see as “lenders” are not actually making their own capital available for a mortgage. Instead, they are getting cash from another party — perhaps a pension fund or insurance company.
“Portfolio” lenders have the ability to lend from their own funds. This means they are able to make loans on the basis of any terms acceptable to them. Sometimes this means a portfolio lender will have money available with less restrictive qualifications than a “conventional” lender or perhaps better terms such as less money down or a lower interest rate. Alternatively, if the market is seen as more risky, a portfolio lender might want more down and require a higher interest rate.
In other words, since portfolio lenders have their own dollars at risk they tend to be prudent in conservative, as they should be.
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