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in Willows, CA
Self-employed borrowers and real estate investors in Willows face the same challenge: traditional lenders want W-2s and tax returns that don't reflect how you actually earn. Bank statement and DSCR loans both solve this problem, but they're built for different situations.
Bank statement loans work when you need to qualify based on your business income. DSCR loans ignore your personal income entirely and focus on whether the property pays for itself.
Bank statement loans analyze 12 to 24 months of your business or personal bank deposits to calculate qualifying income. Lenders apply a percentage to your average monthly deposits after accounting for business expenses.
This works for self-employed borrowers who show strong cash flow but write off most of their income on tax returns. You need decent credit—typically 620 minimum—and at least 10% down for purchases.
DSCR loans qualify you based solely on the rental property's income compared to its expenses. Lenders calculate a debt service coverage ratio—if the rent covers the mortgage payment plus taxes and insurance with room to spare, you're approved.
Your personal income, employment, and tax returns don't matter. This makes DSCR loans faster and simpler for investors who own multiple properties or have complex tax situations.
The biggest split: bank statement loans qualify you as a borrower, while DSCR loans qualify the property as an investment. Bank statement loans work for any property type—your home, a second home, or a rental. DSCR loans only work for investment properties.
Rates vary by borrower profile and market conditions. DSCR loans often price slightly better because they're simpler to underwrite. Bank statement loans require more documentation and analysis, which can add complexity and cost.
Choose bank statement loans if you're self-employed and buying a primary home, second home, or investment property in Willows. This option makes sense when your bank deposits show solid income but your tax returns don't reflect it due to business deductions.
Choose DSCR loans if you're buying a rental property and want the simplest path to approval. This works especially well for investors with multiple properties, 1031 exchanges, or anyone who wants to separate their personal finances from their investment strategy entirely.
Yes, bank statement loans work for investment properties. But if it's purely a rental, DSCR is usually simpler since it skips personal income verification entirely.
DSCR loans often price slightly better due to simpler underwriting. Rates vary by borrower profile and market conditions—your credit and down payment matter more than loan type.
No. Bank statement loans use bank deposits instead of tax returns. DSCR loans don't look at personal income at all, just the property's rental income.
Bank statement loans typically require 620 minimum. DSCR loans often start at 640, though some programs go lower with higher down payments.
Bank statement loans typically require 10-15% down. DSCR loans usually require 20-25% down since they're investment property loans.
DSCR loans close faster because underwriters only analyze the rental property, not your full financial picture. Bank statement loans need more documentation review.