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in Crescent City, CA
Self-employed borrowers and investors in Crescent City face unique challenges when qualifying for traditional mortgages. Bank Statement and DSCR loans offer two distinct paths to financing without W-2 income verification.
Both are non-QM (non-qualified mortgage) products designed for borrowers who don't fit conventional lending boxes. The right choice depends on whether you're buying your primary residence or an investment property in Del Norte County.
Bank Statement loans verify income using 12 to 24 months of personal or business bank deposits. Self-employed professionals, freelancers, and business owners use this program when tax returns don't reflect true earning capacity.
Lenders calculate your qualifying income by averaging monthly deposits, then applying a percentage (typically 50-75%) to account for business expenses. This approach works well for entrepreneurs whose write-offs reduce taxable income but who have strong cash flow.
You can use Bank Statement loans for primary residences, second homes, or investment properties throughout Crescent City and Del Norte County. Rates vary by borrower profile and market conditions.
DSCR loans qualify you based solely on the rental property's income potential, not your personal finances. The Debt Service Coverage Ratio compares the property's monthly rent to its mortgage payment, taxes, and insurance.
A DSCR of 1.0 means the rent exactly covers the housing payment. Most lenders require 1.0 to 1.25 minimum, though some accept lower ratios with larger down payments. Your personal income, employment history, and tax returns don't factor into approval.
This program exclusively serves real estate investors purchasing or refinancing rental properties in Crescent City. It's not available for primary residences or second homes.
The fundamental distinction lies in what income counts for qualification. Bank Statement loans analyze your personal or business cash flow. DSCR loans examine only the rental property's projected income against its expenses.
Bank Statement loans serve owner-occupants and investors alike, making them versatile for various property types. DSCR loans work only for investment properties, but they offer complete privacy regarding personal finances.
Documentation requirements differ significantly. Bank Statement borrowers provide monthly statements and possibly a CPA letter. DSCR borrowers need a lease agreement or rent schedule, plus an appraisal showing market rents.
Choose Bank Statement loans if you're self-employed and buying a home to live in throughout Crescent City. This option also works for investors who want to use personal income to qualify or whose rental properties don't meet DSCR minimums.
Choose DSCR loans if you're purchasing a rental property in Del Norte County and prefer to keep personal finances separate. This path works especially well for investors with strong rental income but complex personal tax situations.
Some investors in Crescent City qualify for both programs. Your specific situation—property type, income documentation, and investment strategy—determines the better fit. Rates vary by borrower profile and market conditions for both options.
Yes, Bank Statement loans work for investment properties. However, if the rental income alone qualifies the property, a DSCR loan might offer simpler documentation and better privacy.
No, DSCR loans skip personal income documentation entirely. Lenders focus solely on the rental property's income compared to its debt obligations.
Down payment minimums vary by lender and borrower profile. Both typically require 15-25% down, with exact amounts depending on credit scores and property characteristics.
No, you choose one qualification method per loan. However, investors can use Bank Statement loans on some properties and DSCR loans on others within their portfolio.
Both non-QM programs typically close in 30-45 days. Bank Statement loans may take slightly longer if gathering 24 months of statements proves challenging.