INTEREST ONLY
Pay Just The Interest For a Preset Period of Time
What is an Interest Only Loan?
An interest only loan allows you to pay only the full monthly interest due on your loan for the fixed period of the loan, which can range from 5 to 10 years. During the fixed payment period, you’re required to make only the interest payments; the principal remains unchanged. When the fixed period expires, you begin paying on the principal, too, resulting in an increased mortgage payment.
One unique characteristic of an interest-only loan is that you may elect to make either the minimum monthly payment (the interest-only portion), or, at your discretion, additional payments to be applied to principal to reduce the principal balance. Doing so will reduce your minimum monthly payment in the following month, because the minimum payment will be recalculated based on the remaining loan principal.
This unique tool is very attractive to borrowers whose income ebbs and flows, as it maximizes cash flow between commissions or bonuses. When income periods are lower, only the interest payment is due. In those periods that your income surges, you can make additional payments towards your principal and lower your future IO payments.
How low can you go?
Interest only loan are a great option if you are this kind of buyer:
Borrowers with short-term home plans who would rather increase monthly cash flow than build equity
Buyers with the intent to remodel or repair a home and then quickly sell it Investors who want to free up cash flow for other investments
Borrowers confident that their monthly income will increase
Buyers with inconsistent monthly income
We’re here to help.
Most lenders will allow you to pay down the principal amount of your loan during the IO period without penalty, but some lenders may have limits on the amount of principal you can pay down during this initial period.
Our loan experts at American Pacific Mortgage can help you choose the IO loan program that will best align with your principal payment plans. An Interest Only loan is a unique program that will offer spectacular benefits to the right borrower, but it may not be right for everyone. If paying your house off quickly is your top priority, the IO loan is not for you. Let us help you select the home loan that is perfect for your individual home goals.
Frequently Asked Questions
Q: Why is the JJ Mack Team considered one of the best mortgage lenders in Roseville?
The JJ Mack Team is known for fast approvals, transparent communication, and a 5-star client experience. With over 106 verified 5-star Google reviews and deep expertise in the Roseville housing market, our team is trusted by both homebuyers and top real estate agents for delivering smooth, on-time closings.
Q: What types of home loans does the JJ Mack Team offer in Roseville?
We provide a wide range of mortgage options, including Conventional loans, FHA, VA, Jumbo, CalHFA first-time buyer programs, investment property loans, refinancing, and down payment assistance. We help you compare programs and find the best mortgage strategy for your financial goals.
Q: Does the JJ Mack Team serve areas outside of Roseville?
Yes. In addition to Roseville, we serve Rocklin, Lincoln, Loomis, Folsom, Granite Bay, Citrus Heights, Sacramento, Fair Oaks, El Dorado Hills, Antelope, Carmichael, and surrounding cities throughout Placer, Sacramento, and El Dorado counties.