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in Cerritos, CA
Cerritos borrowers often need non-QM loans when traditional W-2 verification doesn't work. Bank statement and DSCR loans both skip tax returns, but they solve completely different problems.
Bank statement loans verify your personal income through deposits. DSCR loans ignore your income entirely and qualify you based on rental cash flow.
Bank statement loans underwrite 12 or 24 months of personal or business bank statements. Lenders calculate income by averaging your deposits, then apply a 50% expense ratio for sole proprietors or 25% for corporations.
These work for self-employed borrowers buying a primary residence, second home, or investment property. You need 10-20% down, 620+ credit, and consistent deposit patterns.
Rates run 1-2% higher than conventional loans. Lenders scrutinize irregular deposits and look for stable month-to-month activity.
DSCR loans qualify you based on rental income divided by the property's debt obligation. Lenders need a DSCR ratio of 1.0 or higher, meaning rent covers the mortgage payment, taxes, insurance, and HOA fees.
These are strictly for investment properties. You don't provide tax returns, pay stubs, or employment verification. The property's cash flow is the only income that matters.
Expect 20-25% down and rates 1.5-2.5% higher than conventional investor loans. Credit scores of 620-640 work, but 680+ gets better pricing.
Bank statement loans require proving your personal income through deposits. DSCR loans don't care what you earn—they only care what the property earns in rent.
Down payments differ. Bank statements start at 10% for primary homes. DSCR loans require 20-25% because they're investment-only products.
Bank statement loans work for any occupancy type. DSCR is locked to investment properties, which matters if you're buying a Cerritos home to live in while building rental income elsewhere.
Choose bank statement loans if you're self-employed and buying a home to live in. Choose DSCR if you're buying a rental and don't want to document personal income.
Many Cerritos investors use DSCR loans to scale portfolios without hitting DTI limits. Freelancers and business owners buying primary residences default to bank statements because DSCR doesn't cover owner-occupied properties.
If you're buying a duplex to house-hack, bank statement loans let you use rental income from the other unit. DSCR won't work because you're occupying part of the property.
Yes. Bank statement loans work for investment properties, but DSCR loans typically offer better rates and terms for pure rental deals.
Neither has a clear edge. Both price 1-2%+ above conventional loans. Your credit score, down payment, and property type determine final pricing.
No. DSCR loans skip tax returns entirely. Lenders only review the lease agreement and a rent analysis to confirm cash flow.
Some lenders allow this on bank statement loans. DSCR loans ignore personal income completely, so combining sources doesn't apply.
DSCR loans often close quicker because there's no income documentation to review. Bank statement loans need 12-24 months of statements analyzed.