Question 1

How long is the interest-only period?

Accepted Answer

Most IO loans have a 5 or 10-year interest-only period. After that, you pay principal and interest on the remaining balance.

Question 2

Does my credit score affect the IO rate?

Accepted Answer

Yes, significantly. Non-QM lenders price by credit tier. A 720 score gets a very different rate than a 680.

Question 3

Can I use rental income to qualify?

Accepted Answer

Depends on the lender's program. Some IO products allow rental income. A DSCR structure may be a cleaner path for investment properties.

Question 4

Are IO loans available for primary residences in Eureka?

Accepted Answer

Yes. IO loans can be used for primary homes, second homes, or investment properties. Lender overlays vary.

Question 5

What happens if I sell before the IO period ends?

Accepted Answer

You pay off the balance at closing. No equity was built during the IO period, so your payoff equals roughly what you borrowed.

Interest-Only Loans in Eureka, CA