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Costa Mesa sits in one of California's most expensive counties. High purchase prices push monthly payments beyond what many borrowers can carry on a standard loan.
Interest-only loans solve a real cash flow problem. Lower payments in the early years let buyers qualify for more — or just breathe easier each month.
700+
Min Credit Score
20-30%
Down Payment
5-10 Years
IO Period
Non-QM
Loan Type
6-12 Months
Reserves Required
Interest-Only Loans in Costa Mesa
These are non-QM loans. Expect stricter requirements than a conventional mortgage — typically 700+ credit and 20-30% down.
Lenders want to see strong reserves. Six to twelve months of payments in the bank is common. Your income documentation needs to be airtight.
Local decision guide
Use this guide to connect interest-only loans eligibility, lender expectations, and local market factors before comparing payment options in Costa Mesa.
Costa Mesa sits in one of California's most expensive counties. High purchase prices push monthly payments beyond what many borrowers can carry on a standard loan.
Interest-only loans solve a real cash flow problem. Lower payments in the early years let buyers qualify for more — or just breathe easier each month.
These are non-QM loans. Expect stricter requirements than a conventional mortgage — typically 700+ credit and 20-30% down.
Most retail banks don't touch interest-only. Portfolio lenders and private wholesale lenders are where these actually get done.
At SRK CAPITAL, we work with 200+ wholesale lenders. That gives us real options — not just one bank's version of an IO product.
IO loans aren't for everyone. They work best when you have a clear plan — selling before amortization kicks in, or investing the payment difference.
The IO period typically runs 5-10 years. After that, your payment jumps because you're paying principal on a shorter remaining term. Know that going in.
A jumbo ARM gives you a low rate upfront but still requires full principal payments. An IO loan cuts both principal and rate risk in the early years.
DSCR loans are better for rental properties. If this is a primary or second home, IO fits where DSCR won't go.
Costa Mesa is a mixed market — owner-occupied homes, investment properties, and short-term rentals all exist here. IO loans can fit multiple use cases.
As of April 2026, Orange County remains a high-cost market. IO products help buyers stay competitive without overextending on monthly cash flow.
Usually 5 to 10 years, depending on the lender. After that, the loan fully amortizes over the remaining term.
Only if the property appreciates. You're not paying down principal, so equity comes from market value gains only.
Most IO loans allow it. Extra principal payments reduce your balance and lower the later amortized payment.
Most lenders want 700 or higher. Some portfolio lenders go lower, but expect tighter terms. Rates vary by borrower profile and market conditions.
Yes. They're common for short-term holds and value-add plays in Orange County. Ask us about IO versus DSCR for your situation.
Yes. IO is non-QM, so lender standards are stricter. Stronger credit, more reserves, and larger down payments are the norm.