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San Bruno sits between San Francisco and Silicon Valley, where tech salaries and property values create perfect conditions for interest-only financing. Many borrowers here have lumpy income or stock compensation that makes standard payment structures inefficient.
As of February 2026, rate cuts are expected later this year but not immediately. That makes interest-only loans attractive now—you lock in lower initial payments while rates potentially drop further during your IO period.
Interest-Only Loans in San Bruno
Most IO loans require 700+ credit and 20-30% down, though we've placed borrowers with 680 credit when income is strong. These are non-QM products, so underwriting focuses on your ability to handle the full payment when IO ends.
You need documented income or assets proving you can afford principal and interest payments after the IO period expires. Bank statements, 1099s, or asset depletion all work—standard W-2 qualification isn't required.
IO loans live in the non-QM space, where maybe 40 of our 200+ lenders offer them. Terms vary wildly—some cap IO periods at 5 years, others go to 10. Rate spreads range from 0.5% to 2% above conventional rates.
New products are expanding the space. Some lenders now accept crypto holdings as reserves or income qualification. That matters in San Bruno where tech workers often hold significant digital assets.
I see three borrower types crush it with IO loans: RSU-heavy tech employees who want flexibility before vesting, investors who maximize cash-on-cash return, and self-employed borrowers whose income spikes unpredictably. All three are common in San Bruno.
The mistake is treating IO as affordability help. It's not—it's a cash flow management tool. If you need IO to afford the home, you're buying too much. Use it when you'd rather deploy capital elsewhere at higher returns.
ARMs give you a lower rate with principal paydown. IO gives you a lower payment without equity buildup. For San Bruno investment properties, pair IO with DSCR loans—you qualify on rental income and minimize payments to maximize returns.
Jumbo loans overlap with IO when loan amounts exceed conforming limits. Many borrowers here need both—jumbo size with IO structure. That narrows the lender pool but we place these deals regularly.
San Bruno home prices near San Francisco levels mean many loans hit jumbo territory. That affects IO pricing—jumbo IO loans carry higher rates than conforming IO would. Your effective rate typically runs 1-2.5% above conforming conventional rates.
Proximity to SFO and tech campuses drives strong rental demand. Investors buying here often use IO to keep payments low while rents cover most costs. When appreciation comes, they refi or sell before the IO period ends.
Your payment jumps to include principal, often increasing 30-40%. Most borrowers refinance before this happens, especially if rates dropped or home appreciated.
Vested RSUs count as income with most non-QM lenders. Unvested stock might count as reserves but not income. We structure these deals constantly in San Bruno.
Yes, especially paired with DSCR qualification. You qualify on rental income and keep payments low with IO structure. Strong rental demand here makes this common.
Most lenders want 700+, but we've placed 680 borrowers with strong income. Higher scores unlock better rates and longer IO periods.
Yes, rates run 0.5-2% higher than conventional loans. But initial payments are 25-35% lower. It trades rate for cash flow flexibility.