Question 1

How long is the interest-only period?

Accepted Answer

Typically 5 to 10 years. After that, payments reset to include principal and interest — and they will be higher.

Question 2

Do I build equity during the I/O period?

Accepted Answer

Not through payments. You only build equity if the property appreciates. You are not reducing your loan balance.

Question 3

Can I pay down principal during the I/O period?

Accepted Answer

Most programs allow it. You're just not required to. Check your specific loan terms before assuming.

Question 4

Is an interest-only loan right for investors in Hollister?

Accepted Answer

It can be. Lower payments may improve monthly cash flow. But compare it against a DSCR loan for rental properties.

Question 5

What credit score do I need for interest-only financing?

Accepted Answer

Most non-QM lenders want 680 or above. Some go lower with larger down payments or strong reserves.

Question 6

Are interest-only loans harder to get than conventional loans?

Accepted Answer

Yes. They require a non-QM lender and stricter financial profiles. A broker with wholesale access is essential.

Interest-Only Loans in Hollister, CA