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in Sanger, CA
Sanger investors face a clear choice: qualify with your W-2 income or let the rental property speak for itself. Conventional loans work great when your tax returns show strong income, while DSCR loans ignore your 1040 entirely.
Most Sanger buyers default to conventional without realizing DSCR exists. That's a mistake if you're self-employed, own multiple rentals, or write off most of your income. The right loan depends on how you structure your finances, not just what you can afford.
Conventional loans dominate Sanger for good reason: lower rates, smaller down payments, and predictable guidelines. You can put down as little as 5% on an investment property if you have strong credit and clean tax returns.
Lenders verify your W-2s, pay stubs, and debt-to-income ratio. If your 1040 shows $100k and you want a $400k property, the math either works or it doesn't. No rental income projections, no property analysis — just your ability to carry the mortgage alongside your other debts.
DSCR loans flip the script: the property's rental income is the only income that matters. Lenders order an appraisal with a rent schedule, divide monthly rent by the mortgage payment, and approve you if the ratio hits 1.0 or higher.
Your tax returns never enter the conversation. You could show $40k of income or $400k — makes no difference. This works beautifully for Sanger investors who depreciate properties, run losses on paper, or have complex K-1 income that kills conventional loan approvals.
The rate gap runs 0.5% to 1.5% in favor of conventional. On a $400k Sanger property, that's $150-$250 more per month with DSCR. You're paying for the privilege of skipping income verification.
Down payment tells the same story. Conventional allows 15% down on investment properties, sometimes 5% if you house-hack. DSCR starts at 25% and climbs from there based on credit score and property type. The trade-off is access — DSCR approves deals conventional lenders reject outright.
Go conventional if you're a W-2 earner with clean tax returns and debt-to-income under 45%. The savings compound over 30 years. A 1% rate difference on a $400k loan is $80k in interest over the life of the loan.
Choose DSCR if your tax returns don't reflect your true ability to pay. Self-employed Sanger investors, real estate agents with fluctuating income, and anyone with multiple rental properties already showing paper losses — DSCR is built for you. Pay the rate premium to get the deal done.
Yes, lenders use an appraiser's rent schedule to calculate your DSCR ratio. They don't care if the property is vacant today — projected market rent counts.
Most lenders require 1.0 or higher, meaning rent covers the full mortgage payment. Some allow 0.75 DSCR with larger down payments and stronger credit.
Absolutely. You don't need prior landlord experience. Lenders only care about the property's rental income, not your investment history.
Yes, but it rarely makes sense. You'd trade a lower rate for no-doc convenience on a property you already own.
DSCR often closes quicker — 2-3 weeks versus 4-5 for conventional. No income verification means less documentation and fewer underwriting conditions.