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in Burbank, CA
Burbank investors face a choice: qualify with your W-2 or let the property's rent do the work. Conventional loans reward strong credit and stable income. DSCR loans ignore your tax returns and focus only on rental cash flow.
Most owner-occupants stick with conventional financing for better rates. Real estate investors with multiple properties lean toward DSCR because underwriters never see their personal income.
Conventional loans work for buyers with clean W-2 income and decent credit. You need 620+ for approval, 740+ for the best rates. Down payments start at 3% for primary homes, 15% for investment properties.
Lenders verify your employment, pull tax returns, and calculate debt-to-income ratios. Maximum DTI sits at 50% with strong compensating factors. Most Burbank purchases in the $700K-900K range qualify without hitting loan limits.
DSCR loans qualify investors based on rental income, not paychecks. The property must generate enough rent to cover the mortgage payment plus taxes and insurance. A DSCR of 1.0 means rent equals expenses. Most lenders want 1.1 or higher.
You'll need 20-25% down and 660+ credit. No tax returns, no pay stubs, no employment verification. Burbank rental properties pencil well because strong lease rates support higher loan amounts than personal income would allow.
Conventional loans offer rates 0.5-1% lower than DSCR options. That gap costs about $200 monthly on a $600K loan. You pay less over time but jump through more underwriting hoops with full income documentation.
DSCR loans close faster because lenders skip employment and income verification. You qualify on day one if the rent covers the payment. Trade the lower rate for speed and privacy—your tax returns stay private.
Choose conventional if you're buying a primary residence or have clean W-2 income under 43% DTI. The rate savings compound over 30 years. You'll need stable employment and tax returns that match your loan application.
Pick DSCR when you own multiple rentals, earn inconsistent income, or write off everything for tax purposes. Self-employed borrowers with low taxable income qualify easily. Burbank multifamily properties with strong rent rolls make DSCR straightforward.
No. DSCR loans require the property to be an investment rental. You must have another primary residence and lease this property to tenants at market rates.
Most lenders require rent to cover 110% of the total payment including principal, interest, taxes, insurance, and HOA fees. A $3,000 monthly payment needs $3,300 in rent.
Many DSCR lenders charge prepayment penalties for 1-3 years. Conventional loans typically allow prepayment without fees from day one.
You'd need to refinance into a DSCR product. This makes sense when adding properties or when personal income drops but rental income stays strong.
DSCR loans close 2-3 weeks faster because lenders skip employment verification and tax return analysis. Conventional loans need full income documentation that takes time to process.