Interest Only Loan is one in which the borrower has the option to pay only the interest on the principal amount borrowed for a predetermined period of time. This interest-only payment term is between 3 and 10 years. After the term is over, the payment converts to a principal and interest payment that is fully amortized over the remaining term of the mortgage.

Lending CriteriaDescription
Purpose:
  • Purchase and Refinance
Property Type:
  • Single Family Residence (1-4)
  • Condominium
  • Townhomes
  • Planned Unit Developments
Max Loan-to-Value: (1-2-unit Primary)
  • 80% LTV: $35,000 – $650,000
  • 70% LTV: $650,001 – $1,000,000
  • 65% LTV: $1,000,001 – $1,500,000
Qualifying:
  • 20 years fully amortized
  • 3/1: + 6% above start rate, or fully index rate, whichever is greater.
  • 5 / 7 & 10: + 2% (same as above)
Minimum Credit Scores:
  • 720
Prepayment Penalty:
  • None
Maximum Debt-to-Income (DTI):
  • 45%
Recourse:
  • Yes
Broker Fee:
  • None
Terms:
  • 3 / 5 / 7 / 10-Years ARM’s
Funds to Close / Reserves:
  • <$250,000, or 24 Months PITIA
Income Requirements:
  • Minimum household of $150,000
Closing Timeframes:
  • 45-60 days
Amortization:
  • 30-Years
Collateral:
  • 1st Trust Deeds
Seasoning:
  • Minimum 6 Months
Other Costs:
  • All 3rd Party Fees