Question 1

What happens when my interest-only period ends?

Accepted Answer

Your payment increases to include principal and interest based on the remaining loan term. You can also refinance before this happens if market conditions and your situation allow.

Question 2

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

Accepted Answer

Most lenders allow voluntary principal payments without penalty. This reduces your balance and lowers future payments when the loan adjusts to principal and interest.

Question 3

How long does the interest-only period typically last?

Accepted Answer

Common terms range from 5 to 10 years. The specific duration depends on your lender, loan amount, and overall program structure you select.

Question 4

Do interest-only loans require larger down payments?

Accepted Answer

Yes, most programs require at least 20% down for primary residences. Investment properties often need 25-30% down depending on the lender and property type.

Question 5

Are interest-only loans available for investment properties in Hillsborough?

Accepted Answer

Absolutely. Many investors use interest-only loans to maximize cash flow on rental properties. DSCR programs can combine with interest-only structures for qualifying investment properties.

Interest-Only Loans in Hillsborough: Flexible Financing for High-Value Properties