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San Bernardino's real estate market moves fast, with buyers competing for properties across the city's diverse neighborhoods. Interest-only loans appeal to investors and strategic buyers who want to preserve cash flow while building equity.
Interest-only mortgages let you pay just the interest for a set period—typically 5 to 10 years—before the loan converts to principal-and-interest payments.
700+ FICO
Minimum Credit Score
20% to 30%
Typical Down Payment
6 to 12 months
Required Reserves
5 to 10 years
Interest-Only Period
0.25% to 0.5% above fixed
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Interest-Only Loans in San Bernardino
Interest-only loans demand stricter qualification than conventional mortgages. Most lenders require a 700+ FICO score, 20% to 30% down payment, and documented income that comfortably covers the interest-only payment plus reserves.
Lenders scrutinize your exit strategy—how you'll handle the payment jump when the interest-only period ends. You'll need 6 to 12 months of liquid reserves in the bank. Self-employed borrowers face tighter scrutiny; W-2 income is preferred.
Local decision guide
Use this guide to connect interest-only loans eligibility, lender expectations, and local market factors before comparing payment options in San Bernardino.
San Bernardino's real estate market moves fast, with buyers competing for properties across the city's diverse neighborhoods. Interest-only loans appeal to investors and strategic buyers who want to preserve cash flow while building equity.
Interest-only mortgages let you pay just the interest for a set period—typically 5 to 10 years—before the loan converts to principal-and-interest payments.
Interest-only loans demand stricter qualification than conventional mortgages. Most lenders require a 700+ FICO score, 20% to 30% down payment, and documented income that comfortably covers the interest-only payment plus reserves.
Interest-only loans are a niche product. Retail banks rarely offer them; most come through mortgage brokers and portfolio lenders who keep loans on their own books.
Underwriting takes 30 to 45 days because lenders manually review your income, reserves, and exit strategy. There's no automated approval path. Brokers can shop your file across multiple portfolio lenders to find the best rate and terms.
Interest-only loans make sense in San Bernardino for investors buying rental properties or buyers planning to sell or refinance within 5 to 10 years.
The real advantage appears when you have strong income, significant equity, and a clear timeline. A $500,000 investment property with 25% down and a 7-year hold works. A $450,000 primary residence where you plan to refinance in 5 years also pencils.
Conventional 30-year fixed mortgages carry higher monthly payments from day one but offer payment stability and predictability. You build principal immediately instead of waiting 5 to 10 years. The tradeoff: less cash flow flexibility early on.
Interest-only loans front-load savings but require you to refinance or sell before the payment jumps. If rates rise sharply or your income drops, refinancing becomes expensive or impossible.
San Bernardino's real estate market attracts both owner-occupants and investors seeking value in Inland Empire properties. The city's diverse neighborhoods—from downtown revitalization efforts to established residential areas—appeal to different buyer...
The county's median household income of $82,184 reflects a working-class and middle-class population. Investors and second-home buyers often have higher incomes and can qualify for interest-only terms.
Interest-only payments run 30% to 40% lower in the first years. On a $400,000 loan, that could mean $1,200 vs. $1,900 monthly. But after 5 to 10 years, your IO payment jumps to principal-and-interest—often exceeding the original fixed rate payment.
Yes — most lenders require 20% to 30% down for interest-only mortgages. The higher down payment reduces the lender's risk since you're not building principal during the interest-only period.
Yes, but it works best if you plan to sell or refinance within 5 to 10 years. If you're staying long-term, the payment conversion shock often makes conventional financing smarter. Owner-occupants face stricter underwriting than investors.
Your loan converts to a standard 20 or 25-year principal-and-interest mortgage. Your payment jumps significantly—sometimes 50% or more. You'll need a clear plan: refinance, sell, or absorb the higher payment.
Most lenders require 700+ FICO. Some portfolio lenders go to 680 with strong income and reserves. San Bernardino buyers with scores below 700 typically find better terms with conventional mortgages.