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in Angels Camp, CA
Angels Camp investors face a clear choice: conventional loans work if you qualify on W-2 income, DSCR loans ignore your personal finances entirely. The right pick depends on whether you're buying your first rental or building a portfolio that outgrew traditional lending.
Conventional loans reward strong credit and stable employment with lower rates. DSCR loans care only about one thing: does the rent cover the mortgage?
Conventional loans set the standard for primary homes and investment properties when you have steady W-2 income. You'll need 620+ credit for investment properties, 15% down minimum, and debt-to-income ratios under 45%.
Rates sit 0.5-0.75% below DSCR options because Fannie Mae and Freddie Mac backing reduces lender risk. You'll face tighter scrutiny on tax returns, pay stubs, and employment history.
DSCR loans calculate one ratio: monthly rent divided by monthly payment. Hit 1.0 or higher and you qualify regardless of job history, tax returns, or other mortgages.
Expect rates 1-2% above conventional and 20-25% down. The tradeoff is simple: you pay more but skip the income verification maze that stops portfolio investors cold.
Rate spread runs 1-2% in conventional's favor. A $400K loan costs roughly $350-500 more monthly with DSCR financing. Down payments jump from 15% to 20-25%, adding $20K-40K upfront on typical Angels Camp properties.
Documentation splits these products completely. Conventional demands two years of tax returns, W-2s, and full employment verification. DSCR lenders need a lease agreement and rent analysis, nothing more.
Choose conventional if you have W-2 income, strong credit, and own fewer than four financed properties. The rate savings compound over 30 years, easily worth the paperwork hassle on your first 2-3 rentals.
Switch to DSCR when your tax write-offs tank your qualifying income or you hit Fannie Mae's 10-loan cap. Self-employed buyers and portfolio investors save months per deal by eliminating income verification.
Yes, but conventional likely saves you money if you have W-2 income. DSCR makes sense when tax deductions reduce your qualifying income below debt-to-income limits.
Lenders use either current lease agreements or appraisal-based market rent. You need rent at least equal to your monthly mortgage payment to hit the 1.0 DSCR minimum.
Most lenders want 6-12 months of mortgage payments in reserves per property. Conventional loans require less, typically 2-6 months depending on loan count.
Absolutely. Most investors refinance or buy new properties with DSCR once their portfolio hits 4-5 rentals and conventional underwriting slows down.
DSCR often closes 5-10 days quicker since underwriters skip employment and income verification. Conventional takes longer with more documentation rounds.