Question 1

How long is the interest-only period?

Accepted Answer

Typically 5 to 10 years. After that, the loan recasts and payments include principal.

Question 2

Do I build equity during the IO period?

Accepted Answer

No. You only build equity through appreciation. Principal balance stays flat until the IO period ends.

Question 3

Can I use an IO loan for a Napa investment property?

Accepted Answer

Yes. Many Napa investors pair IO loans with short-term rental income. Lender terms vary.

Question 4

What credit score do I need?

Accepted Answer

Most IO lenders want 700 or higher. Stronger credit means better rate options. Rates vary by borrower profile and market conditions.

Question 5

What happens when the IO period ends?

Accepted Answer

Payments jump — you start repaying principal over the remaining term. Budget for that increase early.

Question 6

Is an interest-only loan risky?

Accepted Answer

It carries more risk than a standard loan. It works best with a clear plan and strong financial footing.

Interest-Only Loans in Napa, CA