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in Arcadia, CA
Arcadia attracts both self-employed professionals and real estate investors who don't fit traditional mortgage boxes. Bank statement and DSCR loans solve different problems for different borrowers.
Bank statement loans qualify you based on personal income shown through deposits. DSCR loans ignore your personal income entirely and qualify the property itself.
Most borrowers need one or the other, not both. The right choice depends on whether you're buying your own home or an investment property.
Bank statement loans let you prove income through 12 or 24 months of business or personal bank deposits. Lenders calculate your average monthly income, then apply it to debt-to-income ratios like a W-2 borrower.
These work for self-employed borrowers buying primary residences, second homes, or investment properties. You need decent credit (usually 620+) and a 10-20% down payment depending on property type.
The catch: lenders take 50-75% of your gross deposits as qualifying income to account for business expenses. If you run heavy expenses through your accounts, your qualifying income drops.
DSCR loans qualify based on whether the property's rental income covers the mortgage payment. Lenders divide the monthly rent by the monthly payment (PITI) to get your ratio. A ratio above 1.0 means the rent covers the debt.
You can close with ratios as low as 0.75, but expect higher rates below 1.0. Your personal income, tax returns, and W-2s don't matter. The property either cash flows or it doesn't.
These only work for investment properties. You can't use a DSCR loan to buy your own home, even if you plan to rent out a room. Minimum credit runs 620-660 depending on the lender.
Bank statement loans require your personal financial documentation. DSCR loans don't care about your income at all. If you're self-employed buying a home to live in, bank statement is your only option here.
DSCR loans need an appraisal with a rent schedule showing market rents. Bank statement loans use standard appraisals. DSCR properties must generate rental income from day one or show strong rent comps.
Rates vary by borrower profile and market conditions. DSCR loans typically price slightly better than bank statement loans when the property has strong cash flow. Both require larger down payments than conventional loans.
Buying a home to live in? Bank statement loan is your path. DSCR doesn't allow owner-occupied properties under any circumstances.
Buying an investment property with solid rental income? DSCR usually wins because you skip tax returns, profit and loss statements, and income verification entirely. The property does the talking.
Self-employed investors sometimes use both loan types in the same portfolio. Bank statement for their primary residence in Arcadia, DSCR for rental properties elsewhere. We see 200+ lenders and match the program to each specific deal.
No. DSCR loans only finance investment properties. If you plan to occupy the home, you need a bank statement loan or another owner-occupied program.
Most bank statement programs don't require full tax returns. Lenders may ask for a 4506-C to verify you file taxes, but they qualify you off deposits instead.
Rates vary by borrower profile and market conditions. DSCR often prices better when the property has strong cash flow above 1.0 DSCR. Bank statement rates depend on your credit and down payment.
No. Bank statement loans use your deposits to calculate income. If you want to skip income verification entirely, you need a DSCR loan on an investment property.
Bank statement loans typically need 10-20% down depending on property type. DSCR loans usually require 20-25% down, sometimes more if the DSCR ratio is below 1.0.