Question 1

How long is the interest-only period?

Accepted Answer

IO periods typically run 5 to 10 years. After that, payments reset to fully amortized — meaning principal and interest on the remaining balance.

Question 2

Do I build equity during the IO period?

Accepted Answer

No. You pay zero principal during the interest-only phase. Equity only grows if the property value increases.

Question 3

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

Accepted Answer

Yes. Some lenders allow IO on investment properties. A DSCR loan with IO terms is one common structure for Ojai rental investors.

Question 4

What credit score do I need for an IO loan in Ventura County?

Accepted Answer

Most non-QM IO lenders want 700 or above. Some portfolio lenders will go lower with stronger compensating factors like large reserves.

Question 5

Are interest-only rates higher than conventional rates?

Accepted Answer

Yes. IO loans carry a rate premium over standard conventional loans. Rates vary by borrower profile and market conditions.

Question 6

Can I pay principal during the IO period if I want to?

Accepted Answer

Usually yes. Most IO loans allow voluntary principal payments. Check your loan terms — some have prepayment restrictions in early years.

Interest-Only Loans in Ojai, CA