Question 1

What happens when the interest-only period ends?

Accepted Answer

Your payment increases to cover principal and interest. Underwrite against that higher number before you close.

Question 2

Can I get an interest-only loan in Highland with a 680 score?

Accepted Answer

Most IO lenders want 700 or higher. A 680 may work with strong reserves and a larger down payment.

Question 3

Is an interest-only loan risky?

Accepted Answer

It depends on your strategy. Investors with clear exit plans use them well. Buyers stretching to afford payments take on real risk.

Question 4

How long does the interest-only period last?

Accepted Answer

Typically 5-10 years depending on the lender and program. After that, principal repayment kicks in.

Question 5

Do I build equity during the interest-only period?

Accepted Answer

Only through appreciation. You pay zero principal during that phase, so your loan balance doesn't shrink.

Interest-Only Loans in Highland, CA