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in Compton, CA
Compton's evolving real estate market attracts self-employed buyers and rental investors who don't fit conventional loan boxes. Both bank statement and DSCR loans skip W-2 verification, but they serve completely different borrower types.
Bank statement loans work for business owners buying a primary residence. DSCR loans serve investors who want rental property cash flow to qualify them, not personal tax returns.
Bank statement loans use 12 to 24 months of business or personal bank deposits to calculate income. Lenders apply a percentage (typically 50-75%) of average monthly deposits as qualifying income.
This works for self-employed borrowers whose tax returns show heavy deductions that lower reportable income. You need decent credit—usually 620 minimum—and 10-20% down for primary residences in Compton.
DSCR loans qualify you based on the property's rental income versus its debt obligations. Lenders calculate a ratio: monthly rent divided by monthly mortgage payment (PITIA).
You don't provide personal income docs at all. The property either carries itself (1.0+ DSCR) or you accept a higher rate if it doesn't. These only work for investment properties—never owner-occupied homes.
The fundamental split: bank statement loans are for people who live in the house. DSCR loans are for rental properties. You can't use DSCR to buy a Compton home you'll occupy.
Bank statement loans scrutinize your business cash flow and personal credit profile. DSCR loans care about the property's numbers—appraisal, market rent analysis, and debt coverage ratio. One underwrites you, the other underwrites the asset.
Choose bank statement if you're self-employed and buying a Compton home to live in. Your business deposits prove income, but tax write-offs killed your qualifying ability through conventional channels.
Choose DSCR if you're adding Compton rental properties to a portfolio and prefer not to show personal income. The property's rent handles qualification—but you'll need 20-25% down and solid rental comps.
Some lenders allow it, but DSCR makes more sense for pure rentals. Bank statement loans work best when you occupy the property and need to prove self-employment income.
Both typically start around 620 minimum, though 680+ gets better rates. DSCR focuses more on property performance than your credit profile compared to bank statement loans.
DSCR often closes quicker since there's no personal income verification. Bank statement loans need 12-24 months of statements reviewed, adding underwriting time.
Yes. Bank statement loans replace tax returns with deposit history. DSCR loans skip personal income docs entirely—they only analyze the rental property's numbers.
Bank statement loans start at 10% down for primary homes. DSCR loans typically require 20-25% down since they're investment-only products.