Question 1

How long does the interest-only period last?

Accepted Answer

Most programs offer 5, 7, or 10 years interest-only. After that, payments adjust to include principal and fully amortize over the remaining term.

Question 2

Can I make principal payments during the interest-only period?

Accepted Answer

Yes. Most interest-only loans allow extra principal payments without penalty. This helps if you have seasonal income spikes from wine sales or harvest.

Question 3

What happens when the interest-only period ends?

Accepted Answer

Your payment increases to cover principal plus interest. Many borrowers refinance before this happens to extend the interest-only benefit or lock in new terms.

Question 4

Do interest-only loans work for primary residences in Paso Robles?

Accepted Answer

Yes, but most lenders prefer them for investment properties or second homes. Expect stricter requirements and higher rates for primary residences.

Question 5

Can I use bank statements instead of tax returns to qualify?

Accepted Answer

Yes. Many non-QM lenders offering interest-only loans accept 12-24 months of bank statements for income verification instead of tax returns.

Question 6

Are interest-only loans adjustable or fixed rate?

Accepted Answer

Both options exist. Fixed-rate interest-only keeps your rate stable during the IO period. Adjustable-rate versions can start lower but fluctuate with the market.

Interest-Only Loans in Paso Robles: Lower Payments for Wine Country Property Owners