Question 1

What is an interest-only loan exactly?

Accepted Answer

You pay only interest for an initial period — no principal. Monthly payments are lower, but your balance doesn't shrink during that time.

Question 2

Who uses interest-only loans in Visalia?

Accepted Answer

Investors, self-employed borrowers, and high-income earners with irregular cash flow. W-2 buyers rarely need them.

Question 3

What credit score do I need?

Accepted Answer

Most non-QM lenders want 700 or higher for interest-only products. Lower scores mean fewer options and higher rates.

Question 4

What happens when the IO period ends?

Accepted Answer

Payments increase — sometimes significantly. You begin paying both principal and interest on whatever balance remains.

Question 5

Can I use rental income to qualify?

Accepted Answer

Yes. Interest-only loans can be paired with DSCR qualification, using property income instead of personal tax returns.

Question 6

Are interest-only loans risky?

Accepted Answer

They carry real risk if you have no exit plan. Borrowers who go in without a strategy often struggle when payments reset.

Interest-Only Loans in Visalia, CA