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in Colusa, CA
Both bank statement and DSCR loans skip traditional income verification, but they serve different borrowers. One qualifies you on personal cash flow, the other on rental property income alone.
In Colusa's tight-knit market, most self-employed buyers lean toward bank statement loans for primary homes. Investors grabbing rental properties use DSCR loans to scale faster without personal income limits.
Bank statement loans replace W-2s and tax returns with 12 to 24 months of business or personal bank deposits. Lenders calculate your income from those deposits, making this ideal for self-employed borrowers with fluctuating income.
You need decent credit—usually 620 minimum, though 680+ gets better rates. Most programs allow up to 90% LTV on primary homes and require at least two years of self-employment history.
DSCR loans ignore your personal income entirely and qualify based on the property's rental cash flow. Lenders divide the monthly rent by the monthly debt to calculate the debt service coverage ratio—1.0 or higher usually works.
These loans work exclusively for investment properties. Most lenders want 15-25% down and won't ask for tax returns, pay stubs, or employment verification.
The core split is property type and income source. Bank statement loans work for any property—primary, second, or investment—but they underwrite your personal cash flow. DSCR loans only finance rentals and completely ignore what you earn.
Rates vary by borrower profile and market conditions, but DSCR loans often price slightly higher since they carry no personal income backstop. Bank statement loans give you more property flexibility but require proving consistent deposits over time.
Choose bank statement loans if you're buying a primary home, second home, or your first rental and your bank deposits show steady income. This works well for Colusa business owners, contractors, and farmers with strong cash flow but messy tax returns.
Go with DSCR loans if you're scaling a rental portfolio and don't want personal income holding you back. Investors buying multiple properties in Colusa prefer DSCR because it doesn't tie up their debt-to-income ratio for future deals.
Yes, you can have a bank statement loan on your primary home and DSCR loans on rental properties. Many investors do exactly that to separate personal and investment financing.
Bank statement loans typically price slightly lower because they underwrite personal income. Rates vary by borrower profile and market conditions, so compare both options with your broker.
No, you can close in your personal name or an LLC. Many investors use LLCs for liability protection, but it's not required for approval.
Yes, if the property isn't rented yet, lenders use a market rent appraisal or comparable lease agreements. Most require an appraisal with a rent schedule included.
Bank statement loans typically start at 620, with better pricing at 680+. DSCR loans also start around 620, though some lenders go as low as 600 for strong properties.