Homeowner gets ahead of adjustable-rate reset

Mortgage broker: Shawn Sidhu Property type: Single-family home in San Mateo County. Appraised value: $975,000. Loan amount: $629,000. Loan type: 10/1 ARM Interest Only. Rate: 4 percent. APR: 4.208 percent. Backstory: The homeowner had an adjustable-rate mortgage that would recast in July. They needed to refinance the loan before then to avoid paying more every month. Banks and credit unions weren’t helpful, as the client needed financing on their non-owneroccupied property with an interest-only option.

The homeowner doesn’t plan on keeping the property for more than 10 years, so maximizing positive cash flow is the highest priority.

Many jumbo lenders do not offer an interest-only loan. Interest-only loans have stricter guidelines, and it’s hard enough to qualify for a primary residence. In general, jumbo lenders are very stringent on their underwriting guidelines.

Many big banks are conservative and don’t understand the benefits of having further positive cash flow with an interest-only product along with using the savings as compared to a principal and interest product to further increase one savings portfolio and fund their retirement/ investment accounts with further funds.

As a mortgage broker, we offer a multitude of loan options as compared to a bank or credit union with a limited scope of products.

Sidhu and the client were also able to close even though one of the borrowers went overseas on vacation for a period of a month.

Shawn Sidhu, Thrive Financial, (510) 206-0533, shawn@bma-loans.com.