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Interest-Only Loans in Pico Rivera
Pico Rivera's stable middle-income housing market attracts borrowers who need payment flexibility early on. Interest-only loans let you pay just interest for 5-10 years before principal kicks in.
This structure works well for buyers planning income growth, investors expecting property appreciation, or self-employed borrowers with irregular cash flow. Most of our Pico Rivera interest-only deals go to business owners and rental property investors.
These are non-QM loans, meaning they don't fit standard agency rules. You'll find them through specialized wholesale lenders, not your local bank branch.
Most lenders want 680+ credit and 20-30% down for owner-occupied properties. Investment properties typically require 25-30% down minimum.
Income documentation varies widely. Some lenders accept bank statements or asset depletion instead of tax returns. Your debt-to-income ratio matters less than your liquid reserves.
Expect to show 12-24 months of reserves after closing. Lenders want proof you can handle the higher payment when principal starts.
Only about 15-20 of our 200+ wholesale lenders offer interest-only products. Each has different credit overlays and property type restrictions.
Some cap loan amounts at $2M. Others go higher but require pristine credit. A few specialize in bank statement programs paired with interest-only terms.
Rate pricing varies dramatically between lenders. We regularly see 1.5-2 point spreads on identical borrower profiles. Shopping matters here more than any other loan type.
Interest-only makes sense for three borrower types: investors expecting quick appreciation, self-employed buyers whose income will jump, and high earners who want cash freed up for investments. If you don't fit one of these, don't use this loan.
The payment shock when principal starts is real. A $600K loan at 7% interest-only costs $3,500 monthly. When amortization starts, that jumps to $4,600-$5,000 depending on remaining term.
Most borrowers refinance before principal kicks in. Plan your exit strategy now. If rates rise or your property doesn't appreciate, you're stuck with the higher payment.
Compared to standard ARMs, interest-only saves you $500-$800 monthly during the interest-only period. But ARMs fully amortize from day one, avoiding payment shock later.
DSCR loans also appeal to Pico Rivera investors, but they require properties to cash flow immediately. Interest-only works when you're betting on appreciation or income growth, not immediate rental income.
Jumbo loans offer lower rates if you qualify conventionally. Interest-only costs 0.5-1.5% more in rate. You're paying for payment flexibility, not a rate discount.
Pico Rivera properties typically range $550K-$750K, putting most borrowers below jumbo thresholds. Interest-only here is more about income flexibility than loan size.
Many Pico Rivera borrowers run small businesses or work in industries with variable income. Bank statement interest-only programs fit this profile better than W-2-dependent conventional loans.
Los Angeles County sees steady appreciation over 10-year cycles. If you're betting on property value growth in Pico Rivera, interest-only gives you lower entry costs now with refinance potential later.
Your payment jumps to include principal, often increasing $1,000-$1,500 monthly. Most borrowers refinance before this happens if rates and equity allow.
Rarely. Most lenders require 20-30% down for owner-occupied properties, 25-30% for investments. Lower down payments mean higher risk lenders won't accept.
Yes, if you expect appreciation or plan to improve and sell. No, if you need immediate cash flow since the payment doesn't reduce principal.
Expect 0.5-1.5% higher rates. Rates vary by borrower profile and market conditions. You're paying for payment flexibility and non-QM underwriting.
Most lenders require 680 minimum. Some go to 660 with compensating factors like higher down payment or 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.