Portfolio loans - a few questions

[Account Closed]

Hi guys, I've just got a couple of questions for you on portfolio loans:

1) Can you fold rehab costs into the loan?
2) How are closing costs paid, can they be rolled in?
3) Does each property get assigned an "origination fees" of any kind.

Thanks

Ben

[Michael Wagner]

Ben Savage,

By their very nature portfolio loans can differ considerably from bank to bank. Because the bank holds them on their books as in house investments, they do not need to conform to fannie/freddie guidelines and therefore the banks make the rules. In my experience, some banks will fold some rehab costs into the loan and require a down payment that is a set percentage of the "project cost". Other banks will only loan a percentage of the purchase price and require you to fund rehab.

Closing costs are usually out of pocket unless you are talking about a refinance.

Each loan will have an origination fee. If more than one property is used to secure the loan (known as a blanket mortgage) there usually is only one origination fee.

Hope that helps.

Another important point is that the terms of these loans tend to improve as your relationship with the bank grows....."more Valuable" customers get better terms.