Question 1

How long is the interest-only period?

Accepted Answer

Most programs offer 5 to 10 years of interest-only payments. After that, the loan recasts and you pay principal plus interest.

Question 2

Will I ever pay down the loan balance?

Accepted Answer

Not during the interest-only period. Principal reduction only starts after the loan recasts — or if you make voluntary extra payments.

Question 3

What credit score do I need in American Canyon?

Accepted Answer

Most interest-only lenders want 700 or higher. Some portfolio lenders go lower, but expect worse terms below that threshold.

Question 4

Can I use this loan for an investment property?

Accepted Answer

Yes. Interest-only structures are common on investment properties in Napa County. Pair it with a DSCR loan for a rental-income-based approval.

Question 5

What happens if I can't afford the payment after recast?

Accepted Answer

You'd need to refinance, sell, or absorb the higher payment. Plan ahead — the recast payment can be significantly higher than the initial one.

Interest-Only Loans in American Canyon, CA