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in Coalinga, CA
Conventional loans work for owner-occupants and some investors with W-2 income. DSCR loans ignore your tax returns and qualify you on rental income alone.
In Coalinga's rental market, DSCR makes sense for investors who own multiple properties or show low taxable income. Conventional loans offer better rates if you're buying a primary residence or have clean tax returns that support your income.
Conventional loans require documented income, 620+ credit, and debt-to-income under 50%. You'll get the lowest rates available—currently 6-7% range for well-qualified borrowers.
Down payment starts at 3% for primary homes, 15% for investment properties. Mortgage insurance applies below 20% down on primary homes only. These loans max out at $766,550 in Fresno County for 2024.
DSCR loans skip your tax returns entirely. Lenders calculate rent divided by mortgage payment—you need 1.0+ ratio to qualify. Most Coalinga rentals easily hit this threshold.
Expect 20-25% down minimum and rates around 7.5-9%. No income verification, no employment letters, no explanation of business write-offs. If the property cash flows on paper, you're approved.
Rate spread runs 1-2% higher on DSCR. A $300K loan costs you roughly $200-350 more monthly with DSCR versus conventional. You're paying for the flexibility to avoid income documentation.
Conventional caps investment property loans at 10 financed properties. DSCR has no such limit—you can own 30 rentals and still qualify. Down payment requirements also differ: 15% conventional versus 20-25% DSCR for investment properties.
Use conventional if you're buying a primary home or your tax returns show strong income. The rate savings justify the paperwork. Also choose conventional if you're under the 10-property limit and your debt ratios work.
Pick DSCR when you own multiple rentals, show heavy tax write-offs, or lack W-2 income. It's the only option for serious investors scaling past 10 properties. Coalinga's rental yields usually support the 1.0+ DSCR threshold without issue.
No. DSCR loans only work for investment properties generating rental income. Primary residences require conventional or government-backed loans.
Most lenders require 1.0 minimum—monthly rent equals or exceeds the mortgage payment. Some allow 0.75 with larger down payments and rate adjustments.
DSCR often closes quicker because there's no employment verification or tax return review. Expect 3-4 weeks versus 4-6 weeks for conventional loans.
Yes. Investors refinance to DSCR when they need cash-out or want to remove income documentation requirements for future purchases.
DSCR simplifies remote investing. No local employment ties required—the property income alone qualifies you regardless of where you live or work.