Question 1

How long is the interest-only period?

Accepted Answer

Typically 5 to 10 years. After that, the loan recasts and you pay both principal and interest.

Question 2

Can I pay down principal during the interest-only period?

Accepted Answer

Most loans allow it. You just aren't required to. Check your specific loan terms for prepayment rules.

Question 3

Do interest-only loans work for primary residences in El Cajon?

Accepted Answer

They can. But lenders underwrite these conservatively — expect tighter income and reserve requirements.

Question 4

What happens when the interest-only period ends?

Accepted Answer

Payments jump significantly. Plan for that increase well before it happens, or refinance in advance.

Question 5

Are interest-only loan rates higher than conventional rates?

Accepted Answer

Yes. Non-QM products carry a rate premium. Rates vary by borrower profile and market conditions.

Question 6

Is an interest-only loan a good fit for an El Cajon rental property?

Accepted Answer

For investors with strong rent income and a clear plan, yes. It's a cash flow tool, not a long-term hold strategy.

Interest-Only Loans in El Cajon, CA