Question 1

Do I build equity during the interest-only period?

Accepted Answer

No principal is paid during the IO term, so you only build equity through appreciation. In Calistoga's market, that can still be meaningful.

Question 2

What credit score do I need for an IO loan?

Accepted Answer

Most non-QM lenders want 700 or higher for interest-only products. Some go lower with a larger down payment.

Question 3

Can I get an interest-only jumbo loan in Calistoga?

Accepted Answer

Yes. Jumbo IO is one of the most common structures we place in Napa County. Expect lender-by-lender variation on max loan size.

Question 4

What happens when the IO period ends?

Accepted Answer

Your loan resets to fully amortizing. Monthly payments increase — sometimes significantly. Plan for that before you close.

Question 5

Is an IO loan a good fit for a vacation rental property?

Accepted Answer

It can be. Lower payments improve short-term cash flow. A DSCR loan may be worth comparing depending on your rental income profile.

Question 6

How long is a typical interest-only period?

Accepted Answer

Most IO loans offer a 5 or 10-year IO period. After that, full principal and interest payments begin for the remaining loan term.

Interest-Only Loans in Calistoga, CA