Question 1

What happens when my interest-only period ends?

Accepted Answer

Your payment jumps to cover principal plus interest for the remaining loan term. Most borrowers refinance, sell, or have increased income by then to handle the higher payment.

Question 2

Can I pay principal during the interest-only period?

Accepted Answer

Yes, most interest-only loans allow extra principal payments without penalty. You're just not required to pay principal during the IO period.

Question 3

Do interest-only loans work for primary residences in Los Banos?

Accepted Answer

Yes, but investment properties get better terms. Lenders view IO loans as investor products and price primary residence loans higher.

Question 4

How much higher are interest-only rates than conventional loans?

Accepted Answer

Expect 1-2% higher rates since these are non-QM products. Rates vary by borrower profile and market conditions across our lender network.

Question 5

Can self-employed borrowers qualify for interest-only loans?

Accepted Answer

Yes, bank statement programs work well for self-employed applicants. You'll need 12-24 months of business or personal bank statements instead of tax returns.

Interest-Only Loans in Los Banos: Lower Payments for Investors and High-Income Borrowers