Question 1

How long is the interest-only period?

Accepted Answer

Typically 5 to 10 years. After that, payments reset to cover principal and interest on the remaining balance.

Question 2

Can I get an interest-only loan with W-2 income?

Accepted Answer

Yes. Strong W-2 borrowers qualify regularly. Lenders still scrutinize reserves and total debt load.

Question 3

Do interest-only loans have higher rates?

Accepted Answer

Yes, typically. You're getting a feature lenders price for risk. Rates vary by borrower profile and market conditions.

Question 4

Will my payment increase after the IO period?

Accepted Answer

It will. Sometimes significantly. Your broker should model both payments before you commit.

Question 5

Is this a good loan for a Milpitas investment property?

Accepted Answer

It can work, but DSCR loans are often cleaner for rental properties. We'll run both scenarios for you.

Question 6

Can I pay down principal during the IO period?

Accepted Answer

Most programs allow it. You're just not required to. Extra principal payments reduce your future adjusted payment.

Interest-Only Loans in Milpitas, CA