*** We are not currently offering conventional loans but would be happy to refer you to an investor-friendly lender from our network. Please call our office for more information.
Depending on who you talk to this can mean so many different things. The true definition of a conventional loan is a loan that can be purchased by Fannie Mae or Freddie Mac. For either of these, to want to buy the loan it must meet certain criteria. The biggest issue we run into as investors with Fannie and Freddie is the number of properties they will allow us to have. The maximum number of financed properties you can have to be considered conventional is ten, but it gets very difficult after just four. This INCLUDES your primary home. Don’t think you qualify? Learn more about portfolio loans.
Pine Financial Group, Inc has relationships with both conventional lenders and portfolio lenders. Check out our Pine Recommends Page.
A portfolio lender is a lender that keeps the loan it originates in its own portfolio. Basically, they will not sell the loan to Fannie Mae or Freddie Mac so they have their own guidelines. This is great because working with portfolio lenders allows us to get outside the normal conventional guidelines.
We will always try to place a loan with a conventional lender first. They generally will be much more favorable with terms such as interest rates and length of loan. We work with investor friendly lenders and will work hard to find the right loan for your situation. Please call us to see how we can help.
Fixed Rate: This is the most basic and most common loan. We can do 15 year, 20 year, 30 year and even 40 year fixed rate loans. A fixed rate loan is just as it sounds; the rate is fixed and will not move through the life of the loan. This is a great product if you will be in the property for the long run, especially with rates being as low as they are.
ARM (Adjustable Rate Mortgage): These loans are great if you use them correctly. The interest rate does move with a determined index. The rate can move as often as each year, every six months or even every month. Your interest rate is calculated by adding a margin (profit) to an index. As the index moves your rate will move. Some common indexes are LIBOR, Prime, and COFI. For more information on how these loans work please visit BankRate.
Hybrid ARMs: This is a fantastic option. This combines the security of a fixed rate loan while giving you lower interest rates like the ARM. The way this works is you will have a fixed rate period at the beginning of the loan and it will automatically roll into an adjustable rate loan. The fixed rate period is commonly 3 years, 5 years, 7 years and 10 years. You might see a 5 year hybrid ARM advertised as 5/1 ARM. This is perfect loan if you only plan to be in the property for a set number of years.