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Interest-Only Loans in Santa Clarita
Santa Clarita homebuyers paying full principal and interest from day one often price themselves out of newer construction and single-family homes in Valencia or Stevenson Ranch.
Interest-only loans drop your monthly payment by 30-40% during the IO period. That breathing room helps investors scale portfolios or high-income earners bridge income gaps.
Most lenders require 680+ credit and 20% down minimum. Self-employed borrowers and investors use these loans more than W-2 earners.
You need solid reserves—typically six months minimum. Lenders want proof you can handle the payment when principal kicks in after 5-10 years.
This is non-QM territory. Banks rarely touch interest-only loans post-2008. You need a broker with access to private and portfolio lenders.
We work with 15-20 lenders who price IO loans competitively. Rates run 0.5-1% higher than conventional, but payment relief justifies the premium for the right borrower.
Most buyers misuse interest-only loans. They stretch for a bigger house instead of investing the payment difference. That's backwards.
Best use case: You earn $400K but most income hits in Q4 bonuses. IO period smooths cash flow. Or you're an investor who renovates and sells within three years—principal paydown is wasted capital.
ARMs give you a lower rate but still require principal payments. DSCR loans focus on rental income, not personal finances. Jumbo loans need pristine credit and income docs.
Interest-only works when you need maximum payment flexibility now and have a clear plan for the payment jump later. If that's not you, we'll find a better fit.
Santa Clarita's newer subdivisions attract buyers who max out budgets. An IO loan can be the difference between a 1,800 sq ft home and a 2,400 sq ft home in the same neighborhood.
Property taxes here run 1.1-1.2% of assessed value. HOA fees in Valencia Ranch or Westridge add $200-400 monthly. Factor those into your true payment calculation before committing to IO.
Your payment jumps 30-40% as principal kicks in. Most borrowers refinance or sell before that happens. Plan for it from day one.
Yes, most lenders allow it. You control when and how much you pay down. That flexibility is the whole point of this loan.
Absolutely. They're less common than for investors, but high earners use them to manage cash flow. Lenders approve them for owner-occupied homes.
Loan limits vary by lender. We've closed IO loans from $500K to $3M+ in Santa Clarita. Your income and assets matter more than the property.
Only if you're underwater and can't refinance when IO ends. Put 20%+ down and maintain reserves. That eliminates most risk.
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.