Interest-only financing comes up for Pennsylvania borrowers whose income arrives unevenly, such as business owners, commission earners and people paid largely in bonuses. The feature lets you pay only interest for an initial period and pay principal when cash allows. It is offered as a non-QM loan, so pricing is often higher than on an agency loan. Before choosing it for a home in Pennsylvania, make sure you can handle the higher payment once the loan begins amortizing.
Call to talk with a licensed loan officer. Programs vary by borrower, property and investor.
Mortgage lenders, brokers and loan originators serving Pennsylvania are licensed by the Pennsylvania Department of Banking and Securities. Non-QM loans are made by the same licensed lenders and brokers, so you can confirm any company's or loan officer's license on NMLS Consumer Access before you apply.
Where the numbers point in Pennsylvania
Counties with the most first liens with an interest-only feature (2024):
| County | First liens with an interest-only feature (2024) |
|---|---|
| York County | 139 |
| Allegheny County | 118 |
| Butler County | 104 |
| Philadelphia County | 85 |
| Luzerne County | 81 |
| Lancaster County | 78 |
| Cumberland County | 74 |
| Adams County | 74 |
| Washington County | 71 |
| Chester County | 70 |
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Prefer to talk first? Call (888) 508-8976. Applying is not a loan approval or commitment to lend; programs vary by borrower, property and investor. ClearPoint Mortgage Advisors, NMLS #173855. Properties in FL, NY, NJ, PA, CT and VA only.
Local pages in Pennsylvania
- Non-QM lenders in Philadelphia
- Non-QM lenders in Pittsburgh
- Non-QM lenders in Allentown
- Non-QM lenders in Harrisburg
- Non-QM lenders in Lancaster
- Non-QM lenders in Scranton
- Non-QM lenders in Reading
- Non-QM lenders in York
- Non-QM lenders in Erie
- Non-QM lenders in Pottstown
- Non-QM lenders in State College
- Non-QM lenders in Lebanon
- Non-QM lenders in Bethlehem
- Non-QM lenders in Altoona
- Non-QM lenders in Hanover
- Non-QM lenders in Johnstown
- Non-QM lenders in Monessen
- Non-QM lenders in East Stroudsburg
- Non-QM lenders in Hazleton
- Non-QM lenders in Williamsport
- Non-QM lenders in Chambersburg
- Non-QM lenders in Levittown
- Non-QM lenders in Bloomsburg
- Non-QM lenders in Uniontown
- Non-QM lenders in Wilkes-Barre
- Non-QM lenders in Pottsville
- Non-QM lenders in New Castle
- Non-QM lenders in Butler
- Non-QM lenders in Norristown
- Non-QM lenders in Chester
Common questions
What happens when the interest-only period ends?
The loan starts amortizing. Your remaining balance is spread over the rest of the term, so each payment now includes principal as well as interest, and the payment goes up. If the rate is adjustable, it may change too. Many borrowers plan to pay down the balance, refinance or sell before or at that point, but none of those outcomes is certain.
Do I build equity with an interest-only loan?
Only through a rise in the home's value or extra principal payments you choose to make. Required payments during the interest-only period do not reduce what you owe. If values fall, you could owe close to or more than the home is worth, which makes selling or refinancing harder. Plan for that possibility rather than counting on appreciation.
Why isn't an interest-only loan a Qualified Mortgage?
The CFPB's Qualified Mortgage definition excludes loans with certain features, including interest-only payments, negative amortization and balloon payments. A loan with an interest-only period can still be made, but as a non-QM loan. The lender must still determine in good faith that you can repay, which includes looking at the payment after the interest-only period ends.
Other non-QM options in Pennsylvania
Bank statement loansNon-QM lendersSelf-employed1099 loansP&L loansAsset depletionNo-doc / stated incomeNew self-employedITIN loansForeign nationalNon-warrantable condoBank statement HELOC
Related guides
- QM vs. Non-QM Loans: What the Difference Means for You
- How to Compare Non-QM Loan Offers: Loan Estimates, Features and Fit
- What Is a Non-QM Loan?
Interest-Only Mortgages overview · Pennsylvania non-QM overview
- 2024 HMDA data