Question 1

What happens when the interest-only period ends?

Accepted Answer

Your payment increases to cover principal plus interest over the remaining loan term. Many borrowers refinance or sell before this happens.

Question 2

Can I get an interest-only loan on my primary residence in Cotati?

Accepted Answer

Yes, but lenders require strong credit and significant reserves. Investment properties get approved more easily with these loan structures.

Question 3

How much higher will my payment be after the interest-only period?

Accepted Answer

Expect 30-50% payment increases depending on rates and remaining term. Run full amortization calculations before committing to any interest-only loan.

Question 4

Do interest-only loans require mortgage insurance?

Accepted Answer

Not if you put 20% down. Higher down payments eliminate PMI regardless of loan structure or property type.

Question 5

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

Accepted Answer

Most lenders allow extra principal payments without penalty. This builds equity faster while maintaining payment flexibility when needed.

Interest-Only Loans in Cotati: Lower Payments, Strategic Flexibility