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in Mendota, CA
Both Bank Statement and DSCR loans skip the W-2 verification that kills most non-traditional deals. The difference is what they count as income—your business deposits or rental cash flow.
Self-employed operators in Mendota need Bank Statement loans. Real estate investors buying rentals need DSCR. Using the wrong one wastes weeks in underwriting.
Bank Statement loans use 12 or 24 months of business or personal bank deposits to calculate income. Underwriters apply a percentage to your average monthly deposits—typically 50% for business accounts, higher for personal.
This works for contractors, farm operators, or anyone with irregular 1099 income. You need consistent deposits and reasonable debt-to-income after expenses. Credit minimums run 620-640 depending on the lender.
DSCR loans ignore your personal income completely. Approval depends on whether the property's rent covers the mortgage payment plus taxes and insurance. A DSCR of 1.0 means rent equals expenses—most lenders want 1.1 to 1.25.
This loan only works for investment properties with rental income. You can't use it on a primary residence. No tax returns, no pay stubs, no employment verification—just an appraisal with rent comparables.
Bank Statement loans look at you—your deposits, your credit, your assets. DSCR loans look at the property—its rent potential, its expenses, its location. One verifies borrower income, the other verifies property income.
Rates vary by borrower profile and market conditions. DSCR loans typically price 0.25% to 0.5% higher than Bank Statement because they carry no personal income recourse. Both require larger down payments than conventional—expect 15% to 25% down.
Choose Bank Statement if you're buying a primary residence or second home with self-employment income. Choose DSCR if you're buying a rental and don't want to prove personal income—especially useful for high earners with complex tax returns.
You can't mix them. A rental property purchase won't work with Bank Statement income verification. A primary residence won't work with DSCR underwriting. Match the loan to the property type and income source.
Yes, but only if you're also using your personal bank deposits to qualify. If the property income alone works, DSCR is simpler and faster.
DSCR typically closes 3-5 days faster because there's no personal income verification. Bank Statement loans need full deposit analysis across all accounts.
DSCR never requires personal tax returns. Bank Statement lenders sometimes ask for one year to verify self-employment status, but income calculation ignores them.
No. Every Bank Statement program requires 12 months minimum. Some lenders offer better pricing at 24 months of consistent deposits.
Most lenders want 1.1 minimum—meaning rent covers 110% of the mortgage payment. Some allow 1.0 with higher rates or more money down.