Loading
Interest-Only Loans in San Fernando
San Fernando attracts investors and self-employed buyers who need flexibility in their monthly cash flow. Interest-only loans let you pay just the interest for 5-10 years before principal payments kick in.
This loan makes sense if you expect income growth, plan to sell before the IO period ends, or want maximum cash for renovations. It's not a starter loan for tight budgets.
Most San Fernando buyers using IO loans are flipping properties, building rental portfolios, or managing variable commission income. The lower initial payment frees up capital for other investments.
Lenders want 680+ credit and 20-30% down for interest-only loans. Self-employed borrowers can use bank statements instead of tax returns.
You'll face higher rates than conventional loans because lenders see more risk. Expect 0.5-1.5% above standard 30-year fixed rates.
The underwriter checks your ability to afford full principal-and-interest payments, not just the IO payment. They're approving you for the worst-case scenario.
This is non-QM territory. Your bank won't offer it. Credit unions won't touch it. You need specialty lenders who price based on your full financial picture.
We work with 30+ lenders who do IO loans with different overlays. Some cap IO periods at 5 years. Others go to 10. Rate and terms vary wildly.
Portfolio lenders dominate this space. They keep loans on their books instead of selling them, which gives them flexibility on approval criteria but less competitive pricing.
I see two groups succeed with IO loans: real estate investors who sell within 3-5 years, and commission earners who need low payments during slow months.
The worst use case is stretching to afford a bigger house. When the IO period ends, your payment can jump 40-60%. Most people refinance before that happens, but you're gambling on qualifying again.
San Fernando's rental market supports the investor strategy. Buy a fixer, pay interest-only while renovating, then refi to a conventional loan based on the improved value.
An ARM gives you a lower rate without the payment shock risk. A DSCR loan works better if rental income covers the payment. Jumbo IO loans exist but require substantial assets.
IO loans pair well with investor loans when you're buying multiple properties. The lower payment on each property lets you qualify for the next one.
If you're self-employed, compare bank statement loans with standard IO terms versus stated income IO loans. The rate difference matters less than the documentation hassle.
San Fernando sits in a tight Los Angeles County market where investors compete with first-time buyers. IO loans give investors an edge by improving cash flow.
Property taxes and insurance in LA County are high. The savings from IO payments get eaten quickly by these fixed costs, so run the real monthly number before committing.
The city's mix of older homes and newer developments attracts fix-and-flip buyers. IO loans fund the acquisition while renovation costs come from other sources.
Your payment jumps because you start paying principal plus interest. Most borrowers refinance or sell before this happens.
Yes, most IO loans allow extra payments without penalty. You're just not required to pay principal.
They can, but lenders scrutinize primary residence IO loans heavily. Expect tougher approval standards than for investment properties.
Expect rates 0.5-1.5% above conventional loans. Your credit, down payment, and property type affect the exact spread.
Absolutely. Bank statement programs work well with IO structures for business owners and commission earners.
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.