Question 1

How long is the interest-only period?

Accepted Answer

Most IO loans have a 5 to 10 year interest-only period. After that, the loan recasts and you start paying principal plus interest.

Question 2

Can I use an interest-only loan for a rental property in Ceres?

Accepted Answer

Yes. Investors frequently use IO loans to maximize monthly cash flow. A DSCR loan is another option worth comparing.

Question 3

What credit score do I need?

Accepted Answer

Most non-QM lenders want at least 680. Some require 700 or higher depending on the loan size and down payment.

Question 4

Will I build equity during the IO period?

Accepted Answer

No — unless the property appreciates. You're only paying interest, so your loan balance doesn't decrease.

Question 5

Are interest-only loans harder to get than conventional loans?

Accepted Answer

Yes. Fewer lenders offer them and qualification standards are stricter. Rates are also higher than conventional products.

Interest-Only Loans in Ceres, CA