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Orange County property values run high. Interest-only loans give buyers a way to own in Fountain Valley without the full principal payment pressure upfront.
These are non-QM loans — meaning they fall outside standard lending guidelines. Not every lender offers them, and qualifying takes more than a good credit score.
700+
Min Credit Score
20-30%
Down Payment
5-10 Years
IO Period
Non-QM
Loan Type
12+ Months
Reserves Required
Interest-Only Loans in Fountain Valley
Lenders want strong compensating factors. Expect requirements like 20-30% down, reserves of 12+ months, and a credit score above 700.
Self-employed borrowers and high-income earners use these most. W-2 earners with tight debt ratios rarely get approved.
Local decision guide
Use this guide to connect interest-only loans eligibility, lender expectations, and local market factors before comparing payment options in Fountain Valley.
Orange County property values run high. Interest-only loans give buyers a way to own in Fountain Valley without the full principal payment pressure upfront.
These are non-QM loans — meaning they fall outside standard lending guidelines. Not every lender offers them, and qualifying takes more than a good credit score.
Lenders want strong compensating factors. Expect requirements like 20-30% down, reserves of 12+ months, and a credit score above 700.
Retail banks rarely offer interest-only products. Wholesale lenders and portfolio lenders are where these programs actually live.
We work with 200+ wholesale lenders at SRK CAPITAL. That reach matters a lot when you need a niche product like this in Orange County.
The interest-only period typically runs 5-10 years. After that, your payment jumps — principal and interest on the remaining balance.
Buyers who plan to sell or refinance before the period ends use these strategically. Buyers who forget about the reset get into trouble.
ARMs also start with lower payments. But an interest-only ARM combines both features — lower rate and no principal — making it the most aggressive structure.
DSCR loans serve investors focused on rental income. Interest-only loans work better for primary buyers or investors who want maximum short-term cash flow.
Fountain Valley sits in one of California's most expensive counties. Higher purchase prices make the payment savings from interest-only more meaningful in dollar terms.
Orange County's competitive market moves fast. Lower IO payments can help buyers stretch their budget and close on properties that would otherwise strain cash flow.
Your payment recalculates to cover principal and interest on the remaining balance. That means a significantly higher monthly payment.
Yes. These aren't limited to investment properties. Primary buyers with strong financials qualify too.
Not during the IO period — unless the property appreciates. You're only paying interest, so the balance doesn't decrease.
Yes. Non-QM guidelines are stricter on reserves and down payment. Expect more documentation and higher thresholds.
Most IO loans allow voluntary principal payments. Check for prepayment penalties before assuming you can pay down freely.
Generally yes. Non-QM products carry a rate premium. Rates vary by borrower profile and market conditions.