Question 1

What happens when my interest-only period ends?

Accepted Answer

Your loan converts to a fully amortizing payment covering principal and interest. The payment typically increases 30-40% depending on remaining term and rate.

Question 2

Can I refinance before the IO period ends in Ukiah?

Accepted Answer

Yes, most borrowers refinance or sell within 5-7 years. Just ensure your property maintains value in Ukiah's smaller market for equity access.

Question 3

Do interest-only loans work for primary residences?

Accepted Answer

Absolutely, as long as you meet reserve and down payment requirements. They're common for high earners managing cash flow across multiple assets.

Question 4

How much lower is the interest-only payment?

Accepted Answer

Typically 20-30% lower than a traditional mortgage. A $500k loan might cost $2,500/month IO versus $3,200/month with principal included.

Question 5

What credit score do I need for interest-only loans?

Accepted Answer

Most lenders require 680 minimum. Stronger credit above 700 opens better rate options and more flexible reserve requirements.

Interest-Only Loans in Ukiah: Lower Payments for Strategic Borrowers