Question 1

Do I ever pay down principal on an interest-only loan?

Accepted Answer

Not during the IO period. After it ends, your loan recasts and you pay principal plus interest on the remaining balance.

Question 2

Can self-employed borrowers in Dos Palos qualify?

Accepted Answer

Yes. Many IO programs accept bank statement income instead of tax returns. That helps borrowers who write off significant business expenses.

Question 3

What happens if I sell before the IO period ends?

Accepted Answer

You pay off the full original balance — you built no equity through payments. Any equity comes from appreciation only.

Question 4

Is an interest-only loan right for a rental property?

Accepted Answer

It can work if cash flow is the priority. Pair it with a DSCR qualification if you want to keep personal income out of the equation.

Question 5

How does my rate compare to a conventional loan?

Accepted Answer

IO rates run higher than conventional rates. Rates vary by borrower profile and market conditions.

Question 6

Can I refinance out of an interest-only loan later?

Accepted Answer

Yes. Many borrowers use IO for a few years then refinance into a conventional loan. Your equity position at that point matters.

Interest-Only Loans in Dos Palos, CA