Question 1

What happens when my interest-only period ends?

Accepted Answer

Your loan converts to fully amortized payments over the remaining term. Monthly payments increase because you're now paying principal plus interest. Most borrowers refinance or sell before this happens.

Question 2

Can I pay principal during the interest-only period?

Accepted Answer

Yes, most lenders allow extra principal payments with no penalty. You're not required to pay it, but you can reduce your balance anytime during the IO period.

Question 3

Do interest-only loans work for investment properties in Belmont?

Accepted Answer

Yes, but DSCR loans often price better for rentals. Interest-only works best for owner-occupied purchases where you have strong personal income and want payment flexibility.

Question 4

How much lower are interest-only payments compared to conventional?

Accepted Answer

During the IO period, payments drop 25-35% compared to fully amortized loans. Exact savings depend on loan amount, rate, and term. Rates vary by borrower profile and market conditions.

Question 5

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

Accepted Answer

Most lenders require 680 minimum, but 720+ gets better pricing. Higher scores offset the risk lenders take on these non-QM products.

Interest-Only Loans in Belmont: Lower Payments Now, More Options Later