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Interest-Only Loans in Lemoore
Lemoore's military housing market creates unique cash flow scenarios. NAS Lemoore personnel often need payment flexibility during deployments or PCS transitions.
Interest-only loans work for borrowers who expect income growth or plan short ownership periods. In Kings County, that typically means Navy officers, ag business owners, or real estate investors.
These loans don't fit W-2 earners buying primary homes with tight budgets. You're deferring principal, not eliminating it—payments jump when the interest-only period ends.
Most lenders require 680+ credit and 20% down for interest-only loans. Some portfolio lenders go to 15% down for exceptionally strong borrowers.
You need provable income and cash reserves—typically 6-12 months of payments. Lenders want to see you can handle the payment when it resets to principal-plus-interest.
This is non-QM territory, meaning underwriting focuses on your total financial picture. Bank statements, asset statements, and debt-to-income ratios all matter more than with conventional loans.
Interest-only loans live in the non-QM space, where rates run 0.75-2% higher than conventional mortgages. Expect 7.5-9% in current markets depending on your profile.
Not every lender offers these programs. We work with portfolio lenders and non-QM specialists who actually close interest-only deals in secondary California markets.
Interest-only periods typically run 5-10 years. After that, payments recalculate to pay off the remaining principal over 20-25 years—often increasing your payment 30-50%.
I see three buyer profiles using interest-only in Lemoore: military families expecting short-term assignments, ag professionals with seasonal income, and investors maximizing cash flow.
The worst use case? Stretching to afford a home you couldn't otherwise buy. When your payment resets in 7 years, you're stuck with a much higher bill or forced to refinance into whatever rates exist then.
Best use case: You're buying a rental property and want maximum monthly cash flow, or you're a high earner who invests the payment difference. Run the math on what happens at reset before you commit.
Adjustable-rate mortgages give you lower payments without deferring principal. If you want payment relief early on, a 7/1 ARM often makes more sense than interest-only for owner-occupants.
For investors, compare interest-only against DSCR loans. DSCR loans use rental income for qualification but require full principal-and-interest payments from day one.
Jumbo borrowers sometimes get interest-only options from portfolio lenders. That combination works for high-net-worth buyers who want liquidity for other investments.
Lemoore home prices stay below state averages, which limits interest-only appeal. You're paying premium rates for payment flexibility on relatively affordable properties.
Military buyers should factor PCS timelines carefully. If you're transferring in 3-4 years, interest-only can work—but only if you're disciplined about building equity another way.
Kings County's agricultural economy creates income volatility for some borrowers. Interest-only doesn't solve cash flow problems—it delays them. You need stable long-term income to handle the reset.
Your payment recalculates to pay off principal over the remaining term, typically increasing 30-50%. Most borrowers refinance before reset or sell the property.
Yes, most loans allow extra principal payments without penalty. You're not required to pay principal, but you can if your cash flow allows.
VA loans don't allow interest-only structures. Military buyers need conventional or non-QM financing for interest-only terms.
Most lenders require 680 minimum. Stronger credit (720+) gets better rates and terms in the non-QM space.
They maximize monthly cash flow but cost more in total interest. Compare against DSCR loans for rental property financing.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.