ISO Lenders: 30 Yr Fixed or......10/1 Interest only ARM?

[Selina Giarla]

I have been striking out in underwriting with 30 yr fixed rates, the math just isn't working out for me to make any cash flow and the debt service monthly expense is wiping out any NOI and thus my yield. So... I am considering pivoting to interest only loans with a refi plan. Problem is... I used to use Bankrate to see a wide variety of rate options for quick underwriting and that website doesn't allow me to get rates for the I/O ARMs for multi family rentals. I really want to understand how those rates are comparing today against 30yr fixed. What are they and where can I easily find them so I don't need to fill out any forms? Credit exceeds 830. Are any lenders giving out I/O ARMS with no points and are the rates lower than 30yr fixed? Any other creative financing or options?

[Jay Hurst]

Quote from @Selina Giarla:

I have been striking out in underwriting with 30 yr fixed rates, the math just isn't working out for me to make any cash flow and the debt service monthly expense is wiping out any NOI and thus my yield. So... I am considering pivoting to interest only loans with a refi plan. Problem is... I used to use Bankrate to see a wide variety of rate options for quick underwriting and that website doesn't allow me to get rates for the I/O ARMs for multi family rentals. I really want to understand how those rates are comparing today against 30yr fixed. What are they and where can I easily find them so I don't need to fill out any forms? Credit exceeds 830. Are any lenders giving out I/O ARMS with no points and are the rates lower than 30yr fixed? Any other creative financing or options?

Rates for interest only on a 10 yr ARM are not going to be lower then a 30 year fixed. (for that matter they will not be lower then a 10 arm with amortizing payments) as interest only actually adds a layer of risk to the lender. But, your payment can still be lower on an IO even with a slightly higher rate due to the simple interest calculation. and sure, you can get them without any points/buy down but the rate will of course be higher then if you did pay points.

and details matter, so as for quotes the reality is to get a real quote, you are likely going to have to give someone the actual details or you are just getting a thumb in the air quote.