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Marin County prices are serious. In Novato, even entry-level homes push buyers toward creative financing.
Interest-only loans lower your monthly payment during the initial period. That frees up cash flow when you need it most.
700+ typical
Min Credit Score
12+ months
Reserves Required
5–10 years
IO Period
Non-QM
Loan Category
These are non-QM loans. Lenders set their own rules, but expect to need strong credit — usually 700 or higher.
Reserves matter more here than on conventional loans. Most lenders want 12+ months of payments sitting in the bank.
Big retail banks rarely offer interest-only products anymore. Wholesale lenders and portfolio shops still do.
SRK CAPITAL works with 200+ wholesale lenders. We know which ones price interest-only competitively for Marin borrowers.
I see this loan used two ways in Novato: cash flow management for high earners and short-hold investor plays.
The risk is real — once the interest-only period ends, your payment jumps. Run the numbers on both phases before committing.
An ARM gives you a lower rate upfront but still builds equity. Interest-only skips principal entirely for the initial term.
DSCR loans are built for rental income qualification. Interest-only is about payment structure — they can overlap, but serve different goals.
Novato sits at the northern edge of Marin. Prices are lower than Mill Valley or Tiburon, but still well above statewide norms.
That price point pushes some buyers toward interest-only to keep payments manageable while they wait on appreciation or a liquidity event.
Typically 5 to 10 years. After that, the loan recasts and you pay principal plus interest on the remaining balance.
Not through payments. Equity only grows if the property appreciates in value during that period.
Most lenders want 700 or higher for interest-only. Stronger credit also gets you better rates. Rates vary by borrower profile and market conditions.
Many programs allow voluntary principal payments. Check for prepayment penalties before you sign — some non-QM loans carry them.
It can be. Lower payments improve monthly cash flow. Pair it with a clear hold strategy and solid reserves.
Non-QM guidelines vary widely by lender. A broker shopping 200+ wholesale sources finds terms retail banks simply won't offer.
Interest-Only Loans in Novato