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Which Home Loan is Right for You?

Which Home Loan is Right for You?

 

Are you getting ready to dive into your first home purchase? Before doing so, it’s helpful to learn the difference between two types of loans offered by banks, to make an educated decision. These two loans are Portfolio and Secondary Market Loans.  Ultimately, deciding which of these loans is best for you, will depend on your preferences and unique circumstances.

What is a Portfolio Loan?

Portfolio loans are both owned and managed by your local bank.  The underwriting for this loan is done to the standards of the individual bank, as the bank is assuming the risk.  This can offer more flexibility in both the property and the borrower qualifying for the loan. Though, due to the additional risk taken on by the banks, long-term fixed loans are less common and loan rates are typically higher than that of a secondary market loan. Prevail Bank offers a variety of portfolio loan products.

Why choose a Portfolio Loan?

  • Offers flexible options for unique properties.
    • Large acreage residential properties
    • Hobby farms
    • Homes with business income
  • Construction loan
  • Blanket loan
  • Purchase and refinance with improvements after closing.
  • Flexibility with loan payment options including weekly and bi-weekly payments.

What is a Secondary Market Loan?

Most borrowers are familiar with secondary market loans offered by banks and mortgage brokers.  These long-term and fixed rate home loans are typically funded by banks using sources such as Fannie Mae and Freddie Mac. Secondary market loans have set national qualification standards on both the home and the borrower. After origination, secondary market loans are packaged into mortgage-back securities and sold to investors.  With the loans Prevail Bank offers, we retain servicing throughout the life of the loan.

Why Choose a Secondary Market Loan with Prevail Bank?

  • Offers long-term, fixed interest rates.
  • They offer competitive interest rates.
  • Loan servicing can be retained locally. These loans with Prevail Bank are serviced and you can make payments at your local branch.

Borrowers tend to apply for the secondary market loan options if they feel the property, their credit, and financial situation will qualify.  If during underwriting of the loan it appears the loan may not qualify, the loan can be modified to a portfolio loan option qualification.  At Prevail Bank we have you covered either way with our competitive secondary market and portfolio loan rates and products.

Talk to your local Prevail Bank Mortgage Loan Officer to learn more!

Meet Dan Krause (NMLS# 562340).

Dan has been with Prevail Bank for 27 years in various roles as mortgage loan originator, branch manager and bank administration.  He is active in the community including Liberty 4-H, 4-H Youth Leadership Organization, Taylor County Fair, Taylor County Reality Fair, Clark County Economic Development and Tourism Board, Clark County Regional Business Fund and Micro-loan fund Loan Committee, Clark County Young Professionals, and Dorchester Planning Commission.

Dan enjoys being able to use Prevail Bank’s flexible home and land loan options to assist borrowers with purchase, refinance, remodeling and construction loans that best fit their needs.

 

 

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