Question 1

Do I build equity during the interest-only period?

Accepted Answer

No. You're paying interest only — zero principal reduction. Equity only grows if the property appreciates.

Question 2

Can I use rental income to qualify in Arcata?

Accepted Answer

Yes, through DSCR underwriting. Many interest-only non-QM loans allow DSCR qualification instead of personal income docs.

Question 3

What happens when the interest-only period ends?

Accepted Answer

Your payment recasts to cover principal and interest. The jump can be significant — budget for it or plan a refinance.

Question 4

Is an interest-only loan a good fit for HSU-area rentals?

Accepted Answer

It can be. Lower payments improve cash flow on student rentals. Just make sure your reserves and exit strategy are solid.

Question 5

What credit score do I need for an interest-only loan?

Accepted Answer

Most non-QM lenders want 700 or higher. Some go lower with stronger reserves or a larger down payment. Rates vary by borrower profile and market conditions.

Interest-Only Loans in Arcata, CA