Question 1

What happens when my interest-only period ends?

Accepted Answer

Your payment increases 30-50% because principal gets added. Most borrowers refinance or sell before this happens. Plan for this increase from day one.

Question 2

Can I make principal payments during the interest-only period?

Accepted Answer

Yes, most lenders allow extra principal payments without penalties. You're only required to pay interest, but you can pay more. Check your specific loan terms.

Question 3

Do interest-only loans work for primary residences in Greenfield?

Accepted Answer

Yes, though most lenders prefer 25% down for primary homes. Investment properties are more common with IO loans. Rates vary by borrower profile and market conditions.

Question 4

How much lower are interest-only payments initially?

Accepted Answer

Payments run 20-35% lower than fully-amortizing loans during the IO period. A $500k loan might save $700-900 monthly. That savings disappears when principal kicks in.

Question 5

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

Accepted Answer

Most lenders require 700 minimum, though some accept 680 with compensating factors. Higher scores get better rates. Non-QM underwriting looks at your complete financial picture.

Interest-Only Loans in Greenfield: Lower Payments, Strategic Flexibility