Question 1

What happens when my interest-only period ends in Barstow?

Accepted Answer

Your payment increases to include principal, typically jumping 30-50%. Most borrowers refinance or sell before this reset hits, especially on investment properties.

Question 2

Can I get an interest-only loan on a Barstow rental property?

Accepted Answer

Yes, rental properties are common for interest-only loans. You'll need 25-30% down and the rental income helps with qualification on DSCR programs.

Question 3

Do interest-only loans make sense for first-time buyers in Barstow?

Accepted Answer

Rarely. These loans work for investors and high-earners expecting income growth, not buyers stretching to afford monthly payments with no equity building plan.

Question 4

What credit score do I need for an interest-only loan?

Accepted Answer

Most lenders require 700 minimum. A few portfolio lenders go to 680 with larger down payments, but rates increase significantly below 700.

Question 5

How much can I save monthly with interest-only payments?

Accepted Answer

Expect 20-30% lower payments versus a fully amortizing loan. A $300,000 loan might drop from $1,800 to $1,250 monthly during the interest-only period.

Question 6

Are interest-only loans fixed or adjustable in Barstow?

Accepted Answer

Both structures exist. Fixed-rate interest-only keeps the same rate during the IO period, while ARM versions adjust annually after an initial fixed period.

Interest-Only Loans in Barstow: Lower Payments for Investors and Strategic Buyers