Question 1

How long is the interest-only period?

Accepted Answer

Typically 5 to 10 years, depending on the lender. After that, payments adjust to cover principal and interest for the remaining loan term.

Question 2

Do I build equity during interest-only?

Accepted Answer

Not through payments — only through property appreciation. You own the same loan balance until principal repayment begins.

Question 3

Can self-employed borrowers in King City qualify?

Accepted Answer

Yes. Most interest-only lenders accept bank statement income, which works well for ag business owners and sole proprietors.

Question 4

Is this loan available for investment property?

Accepted Answer

Yes, and that's a common use case. Pair it with a DSCR structure for rental properties when the numbers support it.

Question 5

What credit score do I need?

Accepted Answer

Most lenders start at 700. Going below that is possible but expect fewer options and higher 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 plan to refinance before the principal kicks in. Have a clear timeline before you commit to this structure.

Interest-Only Loans in King City, CA