Question 1

What happens when the interest-only period ends?

Accepted Answer

Payments jump to fully amortizing over the remaining term. On a 30-year loan with 10 years interest-only, you'll pay principal and interest over 20 years. Plan for 30-40% higher payments.

Question 2

Can I refinance before the IO period ends?

Accepted Answer

Yes, most borrowers refinance or sell within 5-7 years. Prepayment penalties are rare on non-QM interest-only loans. Verify this before closing because some lenders add them.

Question 3

Do interest-only loans work for primary residences in Montague?

Accepted Answer

Absolutely. They're common for self-employed borrowers and business owners who need predictable low payments. Investment properties and second homes also qualify under similar terms.

Question 4

How do lenders verify income for non-W-2 borrowers?

Accepted Answer

Bank statements covering 12-24 months are standard. Some lenders now accept verified crypto holdings as reserves and income. Tax returns work but aren't required for all programs.

Question 5

Are interest-only rates fixed or adjustable?

Accepted Answer

Both options exist. Fixed-rate IO loans lock your interest rate for the full term. Adjustable versions start lower but can increase. Rates vary by borrower profile and market conditions.

Question 6

What down payment do I need in Siskiyou County?

Accepted Answer

Expect 20-25% minimum for interest-only loans. Some lenders go to 15% with strong credit and reserves. Rural properties sometimes require higher down payments than urban equivalents.

Interest-Only Loans in Montague: Flexibility for Complex Income Profiles