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Interest-Only Loans in Tiburon
Tiburon's waterfront properties and hillside estates command premium prices that make interest-only loans tactically valuable. These loans let you defer principal payments during the initial period, freeing capital for investments or business needs.
High-net-worth borrowers in Marin use interest-only structures to preserve liquidity while owning expensive real estate. The strategy works when you have alternative income sources or expect property appreciation to outpace the deferred principal.
Lenders require substantial reserves and strong credit for interest-only loans. Expect minimum 700 credit scores and 20-30% down payments on primary residences.
Many programs cap at 80% loan-to-value on owner-occupied homes. Investment properties typically require 25-30% down and demonstrate borrower sophistication with complex loan structures.
Interest-only loans fall under non-QM lending, meaning fewer lenders offer them compared to conventional mortgages. We access specialized portfolio lenders who understand high-net-worth borrower profiles.
Rates run 0.5-1.5% higher than fully amortizing loans. The interest-only period typically lasts 10 years, after which payments jump when principal amortization begins.
Most Tiburon borrowers using interest-only loans have seven-figure liquid assets and view real estate as one asset among many. They're not stretching to afford the house—they're optimizing cash deployment.
The biggest mistake is ignoring the payment reset. When the interest-only period ends, monthly payments can jump 30-40%. Plan your exit strategy before you sign: refinance, sell, or have cash ready to handle the new payment.
Adjustable rate mortgages offer lower rates but require principal payments from day one. Interest-only ARMs combine both features—low initial rates with deferred principal.
Jumbo loans with standard amortization provide payment stability but higher monthly costs. DSCR loans work for investors who want rental income to qualify without personal income verification.
Tiburon's limited inventory and waterfront scarcity create strong appreciation potential that supports interest-only strategies. Borrowers bet on equity growth while minimizing monthly outflow.
Marin County property taxes run 1.1-1.2% of assessed value, adding to ownership costs that interest-only payments help offset. The tax deductibility of mortgage interest enhances the financial engineering for high earners.
Your payment jumps 30-40% as principal amortization begins. Most borrowers refinance before this happens or have cash reserves to handle the increase.
Yes, but expect 25-30% down and higher rates. Lenders want to see strong reserves and experience managing investment real estate.
They work when you have liquid assets earning more than the mortgage rate. Pure affordability stretching is the wrong reason to choose interest-only.
Most lenders require 700 minimum, though 720+ gets better pricing. These are sophisticated products reserved for strong borrower profiles.
Initial payments run 25-35% lower than fully amortizing loans. On a $2 million loan, that's $3,000-5,000 monthly savings during the IO period.
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.