💡 Daily Mortgage Rates LIVE – Interest-Only Loans

Kick off the week with our Monday livestream!
We’ll share the latest Daily Mortgage Rates and dive into Interest-Only Loans—when they make sense, who benefits, and how they fit into broader mortgage strategies.

Get insights on loan structure, timing, planning considerations, and current market conditions, plus real-world scenarios where interest-only loans can be a strategic tool.

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The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as thousands of Non-QM mortgage loan program variations using alternative income documentation!

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statement Mortgages...

Transcript

So today, we're going to be talking about interest loans, one of our favorite non QM loan options. Definitely opens up a little bit of flexibility for us, which we'll explain here in a moment. Only something we love to offer here at the Mortgage Calculator. If you'd like a full itemized loan estimate, a full breakdown of all of the costs and fees that are in any of these quotes that we go over today, please get with one of our team members. We have over 200 loan officers that would be happy to help you out.

So let me go ahead and get started for today, and we'll go over the general rates and then get into our interest only options. So let me switch my screen here. Alright.

So first thing we typically want to look at is the general markets here. So the best indicator of is typically going to be the 10 treasury, especially when we're talking about different loan programs.

So here we can see the last five days, a little bit up, a little bit down, a little bit recently. But overall, we always wanna put this into perspective and see that we're still at generally one year lows here. So definitely still a great time for everybody to be out there shopping today. The rates are going to fluctuate with the news and the different indicators for the economy. But just look at the general trends, and we are down, which is great.

And now let's look at our actual live mortgage rates. So we just refreshed this page here. So for today, we always set up a standard scenario: $500,000 purchase price for a single-family home, $300,000 loan amount corresponds to 60% loan to value, seventy seven sixty estimated FICO credit score, and 40% estimate income ratio. That way, we can see the lowest rate options for all the different loan programs across the board.

And first up here, our conventional options for our primary home, three year fixed standard options when you think of a loan, mortgage. Sorry. Rates as low as 5.875 today. Finally, PR comes in at 6.111. So definitely pretty similar to what it was the other day as well.

And if for any reason our customer doesn't qualify for a conventional option, typically wanna explore FHA, which allows more leniency on credit issues and a higher to income ratio. And FHA does require upfront and yearly mortgage insurance. So you see here the rates coming at 5.125, but you always wanna look at the APR. Final APR 6.032 with all fees included there.

And if our borrowers are VA eligible, we've done a few shows on this. VA is definitely a great option. Our VA programs come in today at point two five rate. Final NPR, 5.512. So notice when you compare FHA, VA is typically gonna be a much better option because of the fees that are reduced for veterans there under the VA programs.

And USDA coming in today, 5.125 rate. Remember, USDA is only for those properties in the USDA eligible areas, typically the rural areas of the country. And the final APR comes in at 5.779, pretty smoke in there.

And if we compare that, our borrowers that are looking in those rural areas compare that to an FHA or conventional, and we can see here the APR is definitely a little bit better in this scenario. So definitely always explore those USDA options if you are eligible.

And now we're getting our unique options here. So first up for our non QM options, our alt doc options for a primary home. So if our customer doesn't qualify for any of the standard loan and typically a self employed borrower may need to use alternative documentation in order to qualify. And that's what we can use here: bank statements, ten ninety nines, statements, etcetera.

And rates today come in very similar to conventional, 6% rate. Finally, PR is 6.272. So just a slight probably higher cost there for our non options, which is amazing. And our non QM options for Altbox can also be used for investment properties. Rates today come in at 6.125. Finally, PR is six four eight.

And we compare that to our conventional options for investment properties coming in the same rate, 6.125. Final PR is just a touch cheaper there at 6.438.

And our DSCR option, definitely one of our favorite programs. Don't need any income or information. Simply use the estimated rents from the rental property to determine a DSCR ratio. The rents can cover the expenses. That is a ratio of one point zero or higher, aka the property cash flows.

And this first option here uses that one or higher ratio and a three year prepayment penalty, pretty standard for these DSCR options. And rates today come in a smoking 5.99. Finally, we are 6.222, which actually beats conventional and all stock options with no prepay. And we add that three year prepay on the DSCR deal.

And we can even add a five year prepayment penalty to our DSCR options to sweeten the deal as well. Rates come down to 5.875, and the final APR of 6.1, absolutely smoking, better than conventional and all stock. And we still have our no prepayment penalty options. Some states don't allow a prepay penalty, and some investors want one. No problem. Rates today, 6.125, same as conventional.

Final APR, 6.448. So just a touch more expensive to use DSCR. No more employment information needed. And we have a ton of other options: second mortgages, commercial, fixes of all kinds of different options here. So please get with our team members if you'd like to explore those.

Let's get into our topic for today. So first off, I wanna pull up an actual example so we can put this into perspective here. And in my general area, found a nice home for sale here. You can see the inside, but the outside is really nice. It's a nice price here that qualify for conventional or non QM as well. It's not necessarily a jumbo loan.

But let's compare our options here for our customers that are interested in exploring interest only option. So interest only is a feature we can add to our non QM loan program. So first up, let's pull up our first example here for that exact home we're looking at.

Most of our customers that are looking to use non QM all docs are looking to put the minimum down payment. So 10% is the minimum down payment for our all doc options or non QM options. And this is for our primary home, of course, and there is no PMI ever for non QM kids. So this is our typical request. And to make this interesting today, we wanted to add our interest only option.

So when we add our interest only feature, our thirty year fixed loan, what we have is, might be a little hard to see here, but we have a ten year interest only period. And then after ten years, the loan amortizes it into a twenty year fixed amortized loan for the remaining twenty years. And the important thing here though is that using this method, we can qualify the borrower interest only payment for DTI purposes.

Now this isn't in every case in every loan program, but that's typically the advantage of using these loan program options. So a fully amortized payment would be much higher in this case than the 4,488 as our lowest rate option.

So to put 10% down, lowest rate option using interest only 30 or six, 7.49, right? Discount points there on that cost, 2.375. And the lowest cost option, 7.99 rate, costing 0.375. So you see here, we can lower the monthly payment we use for qualification purposes, especially when we are doing our interest only options.

See here some of the details I used to set it up. Set up the standard purchase price, 10% down, and of course, we used our 760 estimated credit score. We used all of our standard scenarios.

So now we have other options as well. Once we go into our interest only, we have our little more forgiving here, forty year interest only. So this is the same scenario: 10% down payment for a purchase of a new primary, no PMI, etcetera, for that same exact home. But when we do our three year fixed with the ten year interest only option, that means after the ten years of interest only, it amortizes into a standard thirty year fixed amortized loan.

So again, the method we can qualify or borrow with the interest only payments for DTI purposes, and we can get rates that are very attractive here still. So 7.5 rate, cost point five discount points. And again, we are going off that interest only payment. And 8.5 rate costing no points. That's our here in this scenario.

So a couple different options here. Obviously, they're different loan programs, slightly different variations, but the point here is to lower our DTI qualifying rate.

Now if we have a customer that already has the home, so say our customer that's looking to sell this actually just needs to lower their monthly payment, that is another amazing tool to use our interest only options.

So if our customer wants to just do a rate and term refinance, for example, and they can get that rate and term refinance here. In this scenario, I put a 70% loan to value for the rate and term refinance. And again, if this is our thirty year fixed, we have a ten year only period, meaning it amortizes into a twenty year amortized loan. But again, we can qualify based on the interest only payment, and you can see the rates here are pretty amazing. 5.999, costing two points in cost.

And we even have some options with lender credits here, 6.625 rate. It's us point seven five back in credits here towards closing costs. So pretty amazing options when we lower the LTV here.

So I always wanted to show this, as we do have amazing options for our interest only. But when you take it to the max LTV on those purchases, oh, they are a little bit higher rates. But you see here pretty amazing rates, very similar to conventional right now in order to lower our monthly payment for our borrower.

Now same thing here, we can use the forty year option as well. So very similar. Set up everything the same here. 90% LTV, primary home, rate and term, but it is using our forty year fixed with ten year interest only. And after the ten year interest only period, we roll it into a thirty year fixed amortized loan, and the payment obviously increases.

But again, we can qualify based on that lower payment, and rates are pretty amazing here. Lowest 5.999 when I pulled up this morning. 2.5 discount points and cost for that lowest rate. We have an option again with lender credit, 6.625 rate. It's us point six two five back in lender credits.

So very similar setups here. You can see it's basically a feature you can add to any of our non QM loan options, especially if our borrower is a little bit tight on the DTI. So let's say the DTI is over 50, which is typically our limit. Maybe it's 52. We can just simply add this feature. There's a little bit of a cost to add this feature, but it will allow us to qualify where we might be slightly over in some cases.

So definitely a great tool and a great tool for our borrowers in order to get that home that they really want. So let me go ahead and switch my screen here. And if you have any questions, feel free to drop them in the chat there.

I don't see any questions for today. But again, we have over 200 loan officers that we happy to send you a full itemized loan estimate of anything you saw today. And we'd be happy to send over those interest only options. And for all of our team members out there, remember interest only is a feature we can add any time, and it typically will allow us to change the qualification and hopefully fix that DTI that we may need to use to qualify.

So good luck everybody out there shopping. Hopefully these interest only programs help you, and see you later this week with another episode of Daily Greens Live. Thanks, everybody.