Question 1

How long is a typical interest-only period?

Accepted Answer

Most programs offer 5 to 10 years of interest-only payments. After that, you pay principal and interest on the remaining balance.

Question 2

Can I pay down principal during the interest-only period?

Accepted Answer

Yes. You're not required to, but most loans allow extra principal payments. Check your loan terms for prepayment restrictions.

Question 3

Do interest-only loans require more money down in Monterey County?

Accepted Answer

Generally yes — 20% to 30% down is common. Higher down payments reduce lender risk on non-QM products.

Question 4

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

Accepted Answer

Most non-QM lenders want 700 or higher. Some programs allow lower scores with compensating factors like large reserves.

Question 5

Are interest-only loans available for investment properties in Sand City?

Accepted Answer

Yes. Investors often use them to manage cash flow. DSCR-based interest-only products are also available for rental properties.

Question 6

What happens when the interest-only period ends?

Accepted Answer

Your payment resets to cover principal and interest over the remaining term. This can increase your payment significantly — plan for it.

Interest-Only Loans in Sand City, CA