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Interest-Only Loans in Santa Fe Springs
Santa Fe Springs sits in a commercial-heavy corridor where many borrowers own rental properties or run businesses. Interest-only loans fit this market because they preserve monthly cash flow while properties appreciate.
We see these loans used by investors buying industrial real estate near the 5 and 605 freeways. Business owners also use them when they need low payments while reinvesting capital elsewhere.
Most lenders want 20-30% down for interest-only loans. Credit minimums run 680-700, but we have programs that go lower with compensating factors like larger down payments.
You'll need reserves—typically 6-12 months of payments in the bank. Income documentation varies. W-2 borrowers qualify, but we see more self-employed and investor clients using these loans.
This is non-QM territory. Your local bank won't offer true interest-only programs. You need access to specialized wholesale lenders who price these loans individually based on your profile.
We work with 15-20 lenders who do interest-only financing. Rates run 1-2% higher than conventional loans. Terms vary—some offer 5 years interest-only, others go 10 years before principal kicks in.
Most borrowers who ask about interest-only loans shouldn't use them. They work when you have a specific exit strategy—selling before the principal kicks in, refinancing into conventional terms, or using freed-up cash to generate higher returns elsewhere.
In Santa Fe Springs, we close these for clients buying warehouses or multi-unit properties where rents cover the interest payment. They're also smart for borrowers with irregular income who can make lump sum principal payments when cash comes in.
Compare interest-only to a DSCR loan if you're buying rental property. DSCR qualifies you based on rent, not income. Interest-only qualifies on traditional income but lowers your payment during the interest-only period.
ARMs also offer lower initial payments, but they adjust over time. Interest-only loans give you predictable interest payments, then convert to fully amortizing. Jumbo loans can sometimes include interest-only features for high-balance purchases.
Santa Fe Springs property values benefit from proximity to major freight corridors and industrial parks. If you're buying commercial real estate here, interest-only financing can maximize your leverage while properties appreciate in this supply-constrained LA County market.
The city's mix of residential and industrial zoning creates opportunities for investors. We've closed interest-only loans on everything from single-family rentals to small warehouse conversions. Property taxes run around 1.1%, which factors into your total carrying cost.
Your loan converts to fully amortizing payments. The payment jumps because you're now paying principal plus interest over the remaining term.
Yes, most programs allow additional principal payments without penalty. You're only required to pay interest monthly.
They can, but most lenders prefer these for investment properties. You'll find better rates and terms on conventional loans for owner-occupied homes.
Payments typically run 30-40% lower during the interest-only period. Exact savings depend on loan amount, rate, and term.
Most lenders require 680-700 minimum. Higher scores get better rates and terms, especially above 740.
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.