Loading
Interest-Only Loans in Escalon
Escalon attracts investors and high-income professionals who value payment flexibility over principal buildup. Interest-only mortgages let you pay just the interest for 5-10 years, freeing capital for other investments.
This isn't a starter-home loan. It works for borrowers with irregular income, investment property owners, or those expecting income growth. Most Escalon borrowers use interest-only to maximize cash flow or bridge to a bigger purchase.
Lenders want 680+ credit and 20-30% down minimum. You need documented income, though non-QM lenders accept bank statements or asset depletion instead of W-2s.
Expect rates 0.5-1.5% higher than conventional loans. Rates vary by borrower profile and market conditions. Strong reserves help—most lenders want 6-12 months of payment cushion in the bank.
Big banks rarely touch interest-only loans anymore. You need a broker with non-QM wholesale access to find these programs. We work with 15-20 lenders offering interest-only across different structures.
Some lenders allow 10-year interest-only periods. Others cap at 5 years. The backend matters too—some convert to 20-year amortization, others to 15 years. That swing changes your payment by thousands monthly.
I see two borrowers who use interest-only well in Escalon. First: investors buying rentals who want maximum cash flow while building equity through appreciation. Second: executives with stock comp who'd rather invest the payment difference than pay down principal at 7%.
The mistake is treating this like easy money. When the interest-only period ends, your payment jumps 40-60%. Plan for that now. If you can't handle the fully-amortized payment, you're house-poor waiting to happen.
DSCR loans and interest-only loans overlap for investors, but DSCR qualifies on rental income while interest-only qualifies on your personal income. ARMs give lower rates but require principal payments from day one.
Jumbo loans sometimes include interest-only options for qualified borrowers. If you need both high loan amounts and payment flexibility, combining jumbo with interest-only gets you there. We structure both regularly.
Escalon property taxes run lower than metro Bay Area cities, which helps the interest-only math work better. Your initial payment stays manageable even with higher rates because the tax base starts reasonable.
Many Escalon borrowers work in Modesto or commute to the Bay. If you expect raises or bonuses in 3-5 years, interest-only bridges the gap. Just don't count on Bay Area appreciation rates here—your exit strategy can't rely solely on price growth.
Your loan converts to full principal-plus-interest payments. Expect your payment to jump 40-60% depending on remaining term and rate structure.
Yes. Many investors use interest-only to maximize rental cash flow. You qualify based on personal income, not rental income like DSCR loans.
No, but 680+ credit is standard. Higher scores unlock better rates. We've closed loans at 660 with larger down payments and strong reserves.
Expect 20-30% down minimum. Investment properties often require 25-30%. Primary residences sometimes qualify at 20% with strong credit and income.
Yes, typically 0.5-1.5% higher. Rates vary by borrower profile and market conditions. The payment savings still work for strategic borrowers despite the rate premium.
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.