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Non-QM 101 – 10/40 Fixed-Rate IO Loans

June 28, 2023
LendSure's 10/40 Fixed-Rate Interest-Only Loans are a great solution to ease your clients' financial burden in this hard housing market.

For many homebuyers, the current market poses affordability challenges.

Home prices remain high, and mortgage rates are well above their pandemic lows. To help your clients deal with a difficult housing market, LendSure offers a solution: 10/40 Fixed-Rate Interest-Only Loans. This innovative product uses a 40-year amortization schedule to lower monthly payments and boost the borrower’s cash flow.

Stretching the repayment term to 480 months rather than 360 months creates some clear benefits in terms of monthly payment amounts.

Here’s an illustration*:

30-year fixed 10/40 IO fixed 10/40 IO fixed with rate buydown
Loan Amount $1,000,000 $1,000,000 $1,000,000
Financed Rate Buydown NA NA $26,250
Total Loan Amount $1,000,000 $1,000,000 $1,026,250
Rate 7.5% 7.875% 6.99%
Monthly Payment $6,992 $6,562 $5,832


As you can see from the example above, your borrower can save $430 a month by opting for a 10/40 Fixed-Rate IO (interest only) over a 30-year loan. With a rate buydown rolled into the loan, the monthly savings widens to $1,160.

Savvy homeowners and property investors can take advantage of this option to leverage their home’s equity and manage their monthly cash flow – all while locking in a low rate for 40 years. Another feature of these loans is that it offers further savings with an interest-only option. This out-of-the-box loan program provides homeowners with the flexibility to make low-interest-only payments or fully amortized payments without penalties.

LendSure’s program appeals to financially savvy borrowers – those who are comfortable with the concept of using debt as a financial management tool. What’s more, LendSure lets your clients further reduce their monthly payments with fully financed rate buydowns.

Some of the features of LendSure’s 10/40 Fixed-Rate Interest-Only program:

  • Investment/business purposes qualify using low interest-only payment and owner-occupied loans qualify with 30-year amortizing payment
  • No prepayment penalties on owner-occupied property loans
  • LendSure can finance origination and discount points with no out-of-pocket costs or impact on cash out
  • Financed points do not raise the LTV pricing bucket
  • A great way for property investors and self-employed borrowers to leverage their equity to increase their monthly cash flow
  • Eligible for ALL Full Doc, DSCR, and 12- or 24-month Bank Statement programs
  • Loan amounts as high as $3,000,000

Our knowledgeable Account Executives are experts in 10/40 Fixed-Rate Interest-Only Loans and can help you find solutions for your borrowers so you can close more deals each month.

Are you ready to grow your business? Conventional loan approval guidelines can be restrictive, but we want to offer our mortgage broker partners the education, the tools, the support, and the guidance they need in order to say “yes” to more of their clients.  This ensures happy borrowers and opportunities for bottom-line growth. What are you waiting for? Let’s get started!

Are you ready to benefit from a commonsense approach to lending?  Contact us today to learn more about non-QM loans and how partnering with LendSure Mortgage Corp. can help grow your bottom line.

*DISCLAIMER: The following scenarios are hypothetical and provided for illustrative purposes only. The actual interest rate will vary from these example scenarios as rates and terms change frequently. The actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, credit history, the location and type of the property, and other factors determined by LendSure.


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