Question 1

How long is the interest-only period?

Accepted Answer

Typically 5 to 10 years, depending on the lender and loan structure. After that, payments increase to cover principal and interest.

Question 2

Do I build any equity during the IO period?

Accepted Answer

Not through payments — only through property appreciation. You're paying zero principal during the IO term.

Question 3

Can I get an IO loan as a primary residence in El Centro?

Accepted Answer

Yes, but lender options are limited. Most IO demand in Imperial County comes from investors, not owner-occupants.

Question 4

What income docs do lenders want?

Accepted Answer

Full doc or 12-24 months of bank statements. Some lenders allow asset depletion for high-net-worth borrowers.

Question 5

Can I pay down principal during the IO period?

Accepted Answer

Most IO loans allow it. Confirm with your lender — some have prepayment restrictions in the early years.

Question 6

What credit score do I need for an IO loan in California?

Accepted Answer

Most non-QM lenders want 680 or higher. Lower scores are possible but expect higher rates and stricter terms.

Interest-Only Loans in El Centro, CA