Question 1

Are interest-only loans legal in California?

Accepted Answer

Yes, they're legal but classified as non-QM. Fewer lenders offer them, and terms are stricter than conventional loans.

Question 2

What happens when the interest-only period ends?

Accepted Answer

Payments reset to cover principal and interest. Monthly payments increase — sometimes significantly — so plan ahead.

Question 3

Can I get an interest-only loan in Gustine with variable income?

Accepted Answer

Yes. Non-QM lenders can use bank statements or asset-based qualifying. Variable agricultural income is workable.

Question 4

Do I ever pay down principal on an IO loan?

Accepted Answer

Not during the IO period unless you make extra payments. Principal paydown begins only after the IO period expires.

Question 5

What credit score do I need for an interest-only loan?

Accepted Answer

Most lenders start at 680. Some non-QM programs accept lower scores with a larger down payment and strong reserves.

Interest-Only Loans in Gustine, CA