Question 1

How long is the interest-only period?

Accepted Answer

Typically 5 to 10 years. After that, the loan recasts and you pay principal plus interest on the remaining balance.

Question 2

Can I get an interest-only loan in Fortuna with self-employed income?

Accepted Answer

Yes. Most non-QM lenders accept bank statements instead of tax returns. Expect to provide 12-24 months of statements.

Question 3

Does interest-only mean my rate is higher?

Accepted Answer

Usually, yes. Non-QM pricing carries a premium over conventional rates. Rates vary by borrower profile and market conditions.

Question 4

Will I owe more than I borrowed?

Accepted Answer

Your balance stays flat during the IO period — it won't grow. But you build zero equity unless the property appreciates.

Question 5

Is interest-only a good fit for a Fortuna rental property?

Accepted Answer

It can be. Lower payments improve monthly cash flow. Just ensure the rent covers costs when the loan recasts to full principal and interest.

Question 6

Can I pay extra toward principal during the IO period?

Accepted Answer

Most interest-only loans allow voluntary principal payments. Check your loan terms — some carry prepayment penalties in the early years.

Interest-Only Loans in Fortuna, CA