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Interest-Only Loans in Industry
Industry sits in LA County's industrial corridor where commercial properties dominate the landscape. Most borrowers here need financing for warehouse conversions, mixed-use projects, or investment properties.
Interest-only loans fit this market because they free up cash for property improvements or business operations. The initial payment reduction lets investors plow capital back into their ventures instead of paying down principal.
Credit minimums start at 660 for most lenders, though some go as low as 620. Down payment ranges from 20% to 30% depending on property type and borrower profile.
Lenders verify income through bank statements, asset depletion, or rental income instead of tax returns. Debt-to-income ratios matter less than reserves and liquidity.
Interest-only programs live in the non-QM space, meaning regional banks and portfolio lenders control this market. Fannie and Freddie don't touch these loans.
Rate spreads vary wildly between lenders—sometimes 2 full points for the same borrower profile. Shopping across our 200+ wholesale lenders typically saves clients $300 to $800 monthly.
Most borrowers underestimate the rate premium on interest-only loans. Expect rates 1.5% to 3% above conventional mortgages depending on term length and property type.
The sweet spot is a 10-year interest-only period on investment properties generating strong cash flow. After that period ends, the fully amortizing payment jumps significantly—plan your exit strategy before closing.
DSCR loans compete directly with interest-only options for rental properties. DSCR uses property cash flow for qualification while IO reduces monthly outflow through deferred principal.
Jumbo ARMs sometimes offer interest-only riders at lower rates than standalone IO loans. If you qualify for traditional jumbo underwriting, explore that route first before going non-QM.
Industry's property mix skews heavily commercial and industrial. Lenders treat these properties differently than residential—expect higher rates and larger down payments for non-residential use.
The city's proximity to major distribution networks makes it attractive for warehouse conversions and logistics facilities. These unique property types require lenders experienced in commercial-residential hybrids.
Your payment converts to fully amortizing over the remaining term. This typically increases monthly payments 40-60% depending on your rate and remaining loan term.
Yes, but expect prepayment penalties for the first 3-5 years. Most borrowers refinance or sell before the IO period expires to avoid payment shock.
They can, but lenders prefer investment properties. Owner-occupied IO loans require stronger credit and larger reserves than rental property financing.
Rates run 1.5% to 3% above conventional mortgages. The exact premium depends on property type, down payment, and interest-only term length.
Most lenders require 660 minimum. Scores above 700 unlock better rates and lower down payment requirements across our lender network.
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.