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in Bellflower, CA
Conventional loans work for homeowners and some investors. DSCR loans exist only for rental properties.
Your choice depends on whether you'll live in the home or rent it out. The underwriting process changes completely between these two options.
Conventional lenders verify your W-2 income and tax returns. DSCR lenders only care if the property's rent covers the mortgage payment.
Conventional loans require income verification through W-2s, tax returns, and pay stubs. You need 620 minimum credit score for most programs.
Down payment starts at 3% for owner-occupied homes in Bellflower. Investment properties need 15-25% down depending on the number of properties you own.
Rates stay competitive because Fannie Mae and Freddie Mac buy these loans. You'll pay lower rates on primary residences than investment properties.
Debt-to-income ratios cap at 50% in most cases. Lenders count the full mortgage payment against your income even if you plan to rent the property.
DSCR loans qualify you based on rental income only. Lenders calculate debt service coverage ratio by dividing monthly rent by the mortgage payment.
You need a DSCR of 1.0 or higher for most lenders. A 1.25 DSCR means rent covers 125% of the mortgage payment.
Minimum 20-25% down payment applies to all DSCR loans in Bellflower. Credit scores start at 660 for most programs.
No tax returns, no W-2s, no employment verification. The property's rent is the only income that matters for approval.
Income verification splits these loans completely. Conventional underwriters want two years of tax returns and recent pay stubs. DSCR underwriters request a lease agreement or rental appraisal.
Rates run 0.75% to 2% higher on DSCR loans. The rate gap reflects the higher risk lenders take without verifying your income.
Conventional loans allow owner-occupancy or investment use. DSCR loans work only for properties you'll rent out within Bellflower.
Down payment requirements favor conventional loans for primary residences. DSCR loans always need 20-25% down regardless of property use.
Choose conventional if you're buying a primary residence in Bellflower. The lower rates and down payment make homeownership more affordable.
Pick DSCR if you're an investor who can't qualify conventionally. Self-employed borrowers and those with complex tax returns benefit most.
Conventional works better for investors with strong W-2 income and simple tax returns. You'll save significantly on the interest rate.
DSCR makes sense when you own multiple rentals and your debt-to-income ratio blocks conventional approval. The property income stands alone.
No. DSCR loans only work for investment properties you'll rent out. Primary residences require conventional or government-backed loans.
Conventional loans start at 620 credit score. DSCR loans typically require 660 minimum, with better rates above 700.
None. DSCR lenders don't review your tax returns, W-2s, or pay stubs. They only verify the property's rental income potential.
Conventional loans offer lower rates, typically 0.75-2% below DSCR rates. Rates vary by borrower profile and market conditions.
Yes through refinancing. Once you meet conventional requirements, you can refinance to capture lower rates and better terms.
Yes. Most DSCR lenders want 6-12 months of mortgage payments in reserves. Conventional loans need less for owner-occupied properties.