Question 1

What is an interest-only loan exactly?

Accepted Answer

You pay only the interest charge each month during the initial period. Your loan balance doesn't decrease until principal payments begin.

Question 2

How long does the interest-only period last?

Accepted Answer

Most products offer 5 or 10-year interest-only periods. After that, payments reset to include principal — and they increase significantly.

Question 3

Can I use an interest-only loan for a Woodside investment property?

Accepted Answer

Yes, but a DSCR loan often underwrites more cleanly for rentals. We'll run both scenarios to see what actually works for your deal.

Question 4

Do interest-only loans hurt my chances of building equity?

Accepted Answer

Yes — you build zero equity through payments during the IO period. Any equity gain comes purely from property appreciation.

Question 5

Why can't I get this loan from my regular bank?

Accepted Answer

Most retail banks stopped offering interest-only products after 2008. Portfolio lenders and wholesale channels are where these programs live now.

Interest-Only Loans in Woodside, CA