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in Hanford, CA
Both Bank Statement and DSCR loans skip W-2 verification, but they serve different borrower types. Bank Statement loans work for self-employed buyers who want to live in the property or run a business from it.
DSCR loans ignore your personal income entirely and focus only on rental cash flow. Most Hanford investors use DSCR for straightforward rental properties and Bank Statement when they need more flexible occupancy options.
Bank Statement loans calculate income from 12 or 24 months of business or personal bank deposits. Lenders typically average your deposits and apply an expense ratio between 25% and 50% to estimate net income.
You can use these loans for owner-occupied homes, second homes, or investment properties. They work well for Hanford business owners with strong cash flow but complex tax returns that don't show traditional income.
DSCR loans qualify you based entirely on the property's rental income divided by its debt obligations. If the property generates enough rent to cover the mortgage payment, taxes, insurance, and HOA fees, you can qualify regardless of personal income.
These loans only work for investment properties—you cannot live in a DSCR-financed home. Most lenders require a DSCR of at least 1.0, meaning the rent equals or exceeds the total housing payment.
The biggest split: Bank Statement loans look at your income, DSCR loans look at the property's income. If you're self-employed and want to live in the house, Bank Statement is your only option since DSCR requires investment use.
DSCR loans generally require larger down payments but simpler documentation. Bank Statement loans offer more flexibility on property use but need detailed deposit records and may apply expense ratios that reduce your qualifying power.
Choose Bank Statement loans if you're self-employed, have consistent deposits, and want to live in the property or use it for business. These work for Hanford entrepreneurs buying a home they'll occupy or a mixed-use property.
Pick DSCR if you're buying a pure rental and the rent covers the payment. Your personal tax returns and employment don't matter—only the lease and property cash flow. This is the cleanest path for investors with multiple properties or complex personal finances.
Yes, Bank Statement loans work for investment properties. You'll still need to provide bank statements showing deposits, but you can finance rentals if the property cash flows.
Yes, lenders order appraisals to verify property value and confirm market rent estimates. The appraisal includes a rent schedule used to calculate your DSCR.
Rates vary by borrower profile and market conditions. DSCR loans sometimes price slightly better due to simpler underwriting, but both are non-QM products with similar rate ranges.
Absolutely. Many investors use DSCR for pure rentals and Bank Statement for properties they occupy or want flexible use on. Each loan stands alone.
DSCR loans often close faster since they skip personal income verification. Bank Statement loans take longer because underwriters review months of deposit records and calculate income.