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in Agoura Hills, CA
Agoura Hills investors face a clear choice: conventional financing that scrutinizes your W-2 or DSCR loans that only care about rental income. Most real estate agents push conventional because it's familiar, but that doesn't make it right for every deal.
The loan you choose changes how much leverage you can get and which properties pencil out. W-2 earners with solid DTI usually prefer conventional. Portfolio investors and self-employed borrowers lean toward DSCR.
Conventional loans give Agoura Hills buyers the lowest rates and best terms—if they can prove stable W-2 income. You'll need tax returns, pay stubs, and a clean debt-to-income ratio under 45%. These loans work for primary homes, second homes, and investment properties up to 8 financed properties.
Down payments start at 3% for owner-occupied homes but jump to 15-25% for investment properties. Credit requirements are strict: 620 minimum for most programs, 680+ for investor loans. Rates vary by borrower profile and market conditions.
DSCR loans ignore your personal income entirely. Instead, lenders divide the property's monthly rent by its total debt payment. A ratio above 1.0 means the property covers itself. Many lenders approve ratios as low as 0.75 if you put more money down.
These are Non-QM loans with higher rates—typically 1-2% above conventional. Minimum down payment is 20-25%. Credit score floor is usually 660. No tax returns, no pay stubs, no employment verification required.
Rate difference is the biggest factor. Conventional runs 1-2% lower, which saves $200-400 monthly on a $600k Agoura Hills rental. But conventional counts against your DTI and limits how many properties you can finance. DSCR doesn't touch your DTI at all.
Documentation separates these products completely. Conventional demands two years of tax returns showing stable income. DSCR needs a lease agreement and rent roll. Self-employed borrowers with write-offs often can't qualify conventionally but sail through DSCR underwriting.
Use conventional if you're buying your first 1-4 rental properties and have clean W-2 income. The rate savings compound over 30 years. Switch to DSCR once you hit portfolio limits or your DTI gets maxed out from existing mortgages.
DSCR makes sense immediately if you're self-employed with heavy deductions, buying properties that cash flow well, or already own multiple rentals. The higher rate is the cost of infinite scalability. I see Agoura Hills investors start conventional, then shift to DSCR after property three or four.
Yes, but you'll pay 1-2% higher rates than conventional. Most first-time investors save money using conventional unless their personal income disqualifies them.
No. DSCR loans don't factor into DTI calculations. This lets you finance more properties without hitting conventional lending limits.
Conventional requires 620 minimum, 680+ for investors. DSCR typically needs 660 minimum, though some lenders go lower with larger down payments.
Yes. Many investors refinance to DSCR once they max out conventional DTI limits. Expect to pay higher rates but gain portfolio capacity.
DSCR often closes quicker—no employment verification or tax return analysis. Conventional takes longer due to income documentation requirements.