Question 1

What happens when my interest-only period ends?

Accepted Answer

Your payment jumps 30-50% as principal gets added over the remaining loan term. Most borrowers refinance or sell before this happens. Rates vary by borrower profile and market conditions.

Question 2

Can I pay principal during the interest-only period?

Accepted Answer

Yes, most lenders allow extra principal payments without penalties. This reduces your balance and lowers the payment shock when the loan converts to full amortization.

Question 3

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

Accepted Answer

Absolutely. Many investors use them to maximize cash flow on rentals. DSCR lenders offer interest-only options based on rental income rather than personal income.

Question 4

How much can I borrow with an interest-only loan in Burlingame?

Accepted Answer

Most lenders cap interest-only loans at $3-4 million, though some portfolio lenders go higher. Your debt-to-income ratio must work at the fully amortized payment, not just the interest.

Question 5

Are interest-only rates higher than conventional loans?

Accepted Answer

Typically 0.5-1.5% higher since lenders hold more risk. Non-QM interest-only loans for self-employed borrowers often run 1-2% above conforming rates. Rates vary by borrower profile and market conditions.

Interest-Only Loans in Burlingame: Lower Payments for High-End Peninsula Properties