Question 1

How long is the interest-only period?

Accepted Answer

Most programs run 5 or 10 years IO. After that, the loan fully amortizes over the remaining term.

Question 2

Do I build any equity during the IO period?

Accepted Answer

Only through appreciation — zero principal pays down. Your balance stays the same until amortization starts.

Question 3

Can I use this for a rental property in Lake Elsinore?

Accepted Answer

Yes. Investors use interest-only loans to minimize carry costs. A DSCR loan may also be worth comparing.

Question 4

What credit score do I need?

Accepted Answer

Most lenders want 700 or above. Some go lower, but expect tighter terms and higher rates below that threshold.

Question 5

Is this loan available as a fixed rate?

Accepted Answer

Some lenders offer fixed-rate IO products, but they're less common. Many IO loans carry an adjustable rate after the IO period.

Question 6

Can I pay principal during the IO period?

Accepted Answer

Usually yes — prepayment is typically allowed. You just aren't required to. Check for prepayment penalties first.

Interest-Only Loans in Lake Elsinore, CA