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Interest-Only Loans in Maywood
Interest-only loans fit Maywood's investor-heavy market where cash flow matters more than equity buildup. Most borrowers here use them for rental properties or short-term ownership strategies.
These loans aren't conventional mortgages. You pay only interest for 5-10 years, then either refinance or start paying principal. That means lower monthly costs upfront but higher payments later.
Expect to put down 20-30% minimum. Lenders want 680+ credit scores and proof you can handle the eventual payment increase when principal kicks in.
W-2 earners can qualify, but investors and self-employed borrowers dominate this space. Bank statement loans and DSCR programs work well with interest-only structures.
Only non-QM lenders offer interest-only terms now. Conventional and FHA programs stopped doing them after 2008, so you're working with portfolio lenders and private capital sources.
Rates run 1-2% higher than standard loans. That premium buys payment flexibility, which matters if you're flipping properties or managing multiple rentals in Maywood.
I see Maywood investors use these for cash-out refinances on appreciated properties. They pull equity while keeping payments low, then reinvest in more units.
The mistake is treating this like a traditional mortgage. You must have a plan for year 6 or 11 when payments jump. That means refinancing, selling, or having cash reserves to cover the increase.
Compare this to a DSCR loan where you pay principal from day one. Interest-only gives you 30% lower payments during the IO period, freeing up cash for renovations or acquisitions.
ARMs offer rate adjustments but require principal payments. Interest-only ARMs exist but add complexity—your rate and payment structure both change over time.
Maywood's affordable entry points make interest-only strategies viable for smaller investors. You can finance properties under $500K and still generate meaningful cash flow differences.
Los Angeles County's property taxes stay constant regardless of loan type. The savings come purely from skipping principal payments, which matters more when margins are thin.
Your payment jumps to include principal, often increasing 30-40%. Most borrowers refinance or sell before that happens to avoid payment shock.
Yes, but lenders scrutinize owner-occupant deals harder. They want proof you can afford the full payment and have a solid reason for choosing IO.
Typically 25-35% less than a fully amortizing loan. A $400K loan might drop from $2,400 to $1,600 monthly during the IO period.
Absolutely. Investors use them to pull equity while minimizing payment increases. You need 25-30% equity remaining after cash-out.
680 minimum for most non-QM lenders. Some portfolio lenders go to 660 with larger down payments and strong reserves.
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.