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in Concord, CA
Concord borrowers who don't fit traditional lending criteria have strong alternatives. Bank Statement Loans and DSCR Loans both offer non-QM financing, but they serve different purposes and borrower profiles.
Self-employed business owners typically use Bank Statement Loans to document their income through deposits. Real estate investors prefer DSCR Loans because qualification depends on rental property cash flow, not personal income.
Understanding which program matches your situation helps you move forward with confidence. Both options provide flexible underwriting in Contra Costa County's competitive market.
Bank Statement Loans use 12 to 24 months of personal or business bank statements to verify income instead of tax returns. Lenders calculate your qualifying income by analyzing deposits and averaging monthly cash flow.
This option works well for self-employed professionals, independent contractors, and small business owners in Concord. You can qualify even if you write off significant business expenses that reduce your taxable income.
Credit scores typically need to be 620 or higher, with down payments starting at 10-20%. Rates vary by borrower profile and market conditions, reflecting the flexible underwriting approach.
DSCR Loans qualify you based on the rental property's income potential rather than your personal earnings. The Debt Service Coverage Ratio compares the property's rental income to its total monthly debt obligation.
These loans serve real estate investors purchasing or refinancing rental properties in Concord. Your employment history, W-2s, and tax returns don't factor into approval—only the property's numbers matter.
Most programs require a DSCR of 1.0 or higher, meaning rental income covers the mortgage payment. Down payments typically start at 20-25%, with credit score minimums around 640.
The primary difference lies in what income the lender evaluates. Bank Statement Loans assess your personal or business cash flow through deposits. DSCR Loans ignore your income entirely and focus solely on rental property performance.
Property type also differs significantly. Bank Statement Loans work for primary residences, second homes, and investment properties. DSCR Loans exclusively finance investment properties—you cannot use them for homes you'll occupy.
Down payment requirements vary by program and profile. Bank Statement Loans may accept 10-15% down for primary residences. DSCR Loans typically require 20-25% down since they carry investment property risk.
Documentation burden separates these programs too. Bank Statement borrowers provide extensive deposit records and business documentation. DSCR borrowers skip personal income paperwork entirely, submitting only property-related documents and lease agreements.
Choose Bank Statement Loans if you're self-employed and buying a home to live in or need financing for any property type. This option makes sense when you have strong cash flow that doesn't show up on tax returns due to business deductions.
Select DSCR Loans when purchasing or refinancing rental properties in Concord and want to avoid personal income documentation. Investors building portfolios appreciate how DSCR financing doesn't impact their debt-to-income ratio for future purchases.
Some borrowers qualify for both programs but pick based on convenience. If you're buying a rental with strong income numbers, DSCR offers simpler documentation. If the rental income falls short of the mortgage payment, Bank Statement Loans might work better by considering your personal cash flow.
No, you choose one program per transaction. However, you might use Bank Statement Loans for your residence and DSCR Loans for rental properties simultaneously.
Rates vary by borrower profile and market conditions. Both are non-QM products with similar rate ranges. Your credit score, down payment, and specific situation determine your rate.
DSCR Loans typically don't require personal tax returns. Bank Statement Loans may request business returns for context, but they don't determine your qualifying income.
Yes. Investors sometimes refinance from Bank Statement to DSCR once a property has rental income. Self-employed buyers might switch from DSCR to conventional after establishing W-2 employment.
DSCR Loans often close slightly faster due to simpler documentation. Bank Statement Loans require thorough review of 12-24 months of deposits, adding a few days to underwriting.