Mortgage Navigator • Non-QM / Non-Conforming

Interest-Only Mortgages

A lower initial required payment does not mean the principal disappears.

How it works

During an interest-only period, scheduled payments may not reduce principal. When the interest-only period ends, principal amortization can cause the required payment to increase materially.

Qualification and risk

CFPB’s ability-to-repay framework generally prevents covered lenders from qualifying a borrower solely on a temporary teaser payment. Exact qualification treatment and product features must be reviewed before comparing payments.

Product-specific guidelines matter. Non-QM and non-conforming products are private-investor programs. Documentation, credit, LTV, reserves, property, prepayment terms where legally permitted, and other requirements vary by investor, lender, occupancy and loan purpose. Examples here are educational—not universal eligibility promises.

Consumer-protection references

CFPB Ability-to-Repay / Qualified Mortgage Rule · CFPB: What is a Qualified Mortgage?