Question 1

What credit score do I need for an IO loan in Del Rey Oaks?

Accepted Answer

Most IO lenders want at least 700. Some programs start at 680, but expect tighter terms and higher rates at that floor.

Question 2

Can I use an interest-only loan to buy a rental property here?

Accepted Answer

Yes, but a DSCR loan may qualify you more easily. IO loans qualify on personal income; DSCR qualifies on the rental income the property generates.

Question 3

What happens when the interest-only period ends?

Accepted Answer

Payments jump because you start paying principal on the remaining term. A 30-year IO loan with a 10-year IO period repays principal over just 20 years.

Question 4

Are IO loans available for primary residences in California?

Accepted Answer

Yes. IO loans can be used for primary homes, second homes, and investment properties. Guidelines vary by lender and property type.

Question 5

How long does it take to close an IO loan?

Accepted Answer

Non-QM IO loans typically take 25–35 days. Unusual income documentation or appraisal complexity can push that timeline further.

Question 6

Do IO loans have prepayment penalties?

Accepted Answer

Some do. This is common in non-QM lending. Ask for the prepayment schedule upfront — it can affect your exit strategy significantly.

Interest-Only Loans in Del Rey Oaks, CA