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in Biggs, CA
Self-employed professionals and real estate investors in Biggs face unique challenges when seeking traditional mortgage approval. Both Bank Statement Loans and DSCR Loans offer alternative qualification paths that don't rely on tax returns or W-2 income.
Understanding the fundamental difference between these two non-QM options helps Butte County borrowers choose the right financing strategy. One focuses on your business income; the other on property cash flow.
Bank Statement Loans verify income using 12 to 24 months of personal or business bank deposits. Lenders analyze your average monthly deposits to determine qualifying income, making this ideal for self-employed Biggs residents with strong cash flow.
This option works well for business owners, freelancers, and independent contractors who write off significant expenses on their tax returns. The focus shifts from taxable income to actual cash flow through your accounts.
Borrowers typically need credit scores above 600 and can qualify for both primary residences and investment properties. Down payment requirements generally start at 10% but vary based on property type and borrower profile.
DSCR Loans qualify borrowers based entirely on the rental property's income potential rather than personal earnings. The lender calculates the Debt Service Coverage Ratio by dividing the property's monthly rent by its monthly debt obligations.
This financing option serves real estate investors in Biggs who want to grow their portfolios without personal income verification. Your existing income, employment status, and tax returns don't factor into the approval decision.
Most lenders require a DSCR of 1.0 or higher, meaning the rent covers or exceeds the mortgage payment. These loans work exclusively for investment properties and typically require 20-25% down payments.
The primary distinction lies in what income the lender evaluates. Bank Statement Loans examine your personal or business cash flow, while DSCR Loans focus solely on the rental property's income potential.
Bank Statement Loans serve owner-occupied homes and investment properties, offering flexibility for self-employed borrowers buying their Biggs residence. DSCR Loans only finance rental properties, making them unsuitable for primary homes or second residences.
Documentation requirements differ significantly. Bank Statement borrowers provide 12-24 months of statements and must demonstrate consistent deposits. DSCR borrowers need a lease agreement or rental appraisal showing the property generates sufficient income to cover the mortgage.
Choose Bank Statement Loans if you're self-employed and purchasing a home to live in or building a mixed portfolio in Butte County. This option makes sense when your bank deposits reflect strong income that doesn't show up on tax returns.
DSCR Loans suit investors focused exclusively on rental properties who want to scale their portfolio quickly. This path works best when you're buying cash-flowing properties and prefer not to provide personal income documentation.
Your specific situation determines the better choice. Meeting with a mortgage broker helps clarify which program aligns with your Biggs real estate goals and financial profile. Rates vary by borrower profile and market conditions for both options.
Yes, Bank Statement Loans work for both owner-occupied homes and investment properties. You'll qualify based on your personal or business bank deposits rather than the rental income.
DSCR Loans typically require 20-25% down for investment properties. Bank Statement Loans may start at 10% down depending on the property type and whether it's your primary residence.
Both programs accept lower credit scores than conventional loans. Bank Statement Loans often approve scores around 600, while DSCR requirements vary by lender but generally start around 620-640.
You can use different loan types for different properties. Many Biggs investors use Bank Statement Loans for personal residences and DSCR Loans for their rental portfolio.
Both non-QM loans typically close in 30-45 days. Bank Statement Loans may take slightly longer due to income calculation analysis, while DSCR Loans focus primarily on property appraisal and rent documentation.