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in Gridley, CA
Gridley investors and self-employed borrowers often face challenges with traditional mortgage qualifying. Bank Statement Loans and DSCR Loans offer two distinct paths to financing when W-2 income documentation isn't available.
Both are non-QM products designed for non-traditional borrowers in Butte County. The key difference lies in what they measure—personal income through bank statements versus property cash flow through rental income.
Bank Statement Loans verify income using 12 to 24 months of personal or business bank deposits. This option works well for self-employed professionals, contractors, and business owners in Gridley who show strong cash flow but have complex tax returns.
Lenders analyze your deposits to calculate average monthly income, typically using 50% to 100% of deposits depending on business expenses. Credit scores typically need to be 620 or higher, with down payments starting around 10% to 20%.
This loan type suits borrowers purchasing primary residences, second homes, or investment properties where personal income strength matters. Rates vary by borrower profile and market conditions.
DSCR Loans qualify borrowers based solely on a rental property's ability to cover its own mortgage payment. Personal income doesn't factor into approval—only the property's rental income versus its debt obligations.
The debt service coverage ratio compares monthly rental income to the monthly mortgage payment. A ratio above 1.0 means the property generates enough rent to cover its costs. Some lenders approve ratios as low as 0.75 with larger down payments.
Perfect for Gridley real estate investors building portfolios without hitting personal debt-to-income limits. You can finance multiple properties based on each one's performance, not your tax returns. Rates vary by borrower profile and market conditions.
The fundamental difference comes down to what you're proving. Bank Statement Loans prove you personally earn enough income through your bank deposits. DSCR Loans prove the property itself earns enough rent to sustain the mortgage.
Bank Statement Loans work for any property type you'll occupy or rent. DSCR Loans only finance investment properties—you cannot live in a property financed with a DSCR Loan. Employment type matters for bank statement programs but is irrelevant for DSCR.
Down payment requirements differ slightly. Bank Statement Loans may allow 10-15% down for primary residences, while DSCR Loans typically require 20-25% down for investment properties. Credit score minimums are similar, usually 620 or higher for both.
Choose Bank Statement Loans if you're self-employed and buying a home to live in, or if you want flexibility to purchase primary residences and investment properties. This option suits Gridley contractors, business owners, and professionals with strong deposit history but complex tax situations.
Choose DSCR Loans if you're a real estate investor focused purely on building rental property portfolios. This works especially well for investors who want to acquire multiple Gridley properties without personal income limiting their buying power.
Some borrowers use both strategically—Bank Statement Loans for their primary residence and DSCR Loans for their investment properties. Your specific situation, property goals, and financial profile determine the best fit.
Yes, Bank Statement Loans work for investment properties, vacation homes, and primary residences. The qualifying factor is your personal bank statement income, not the property's rental income.
No, DSCR Loans do not require tax returns, W-2s, or employment verification. Qualification depends entirely on the property's rental income covering the mortgage debt service.
Rates vary by borrower profile and market conditions. Both are non-QM products with similar rate structures, though specific terms depend on credit score, down payment, and loan amount.
Yes, many Gridley borrowers qualify for both. The choice depends on whether you're buying to live there or strictly for investment purposes.
Bank Statement Loans may allow 10-15% down for primary residences and 15-20% for investments. DSCR Loans typically require 20-25% down for investment properties.