Question 1

How long does the interest-only period last?

Accepted Answer

Typically 5 to 10 years. After that, payments reset to include principal, which raises your monthly cost significantly.

Question 2

Do I build equity during the interest-only period?

Accepted Answer

No. You only build equity if the property appreciates. You're not paying down the loan balance during that period.

Question 3

Can I use this loan on a Capitola vacation rental?

Accepted Answer

Yes. Many investors use interest-only loans on short-term rentals. Qualifying still depends on your personal income and credit profile.

Question 4

What credit score do I need?

Accepted Answer

Most non-QM lenders want 700 or higher for interest-only. Lower scores mean higher rates or outright denial.

Question 5

Is this loan fixed or adjustable?

Accepted Answer

Both exist. Some interest-only loans carry a fixed rate. Others are adjustable. The structure affects your risk at reset — ask upfront.

Interest-Only Loans in Capitola, CA