Question 1

Can I use bank statements if I'm self-employed in Compton?

Accepted Answer

Yes. Bank statement loans are designed for self-employed borrowers. Lenders average your deposits over 12 to 24 months and deduct business expenses. You'll need consistent deposits and clean bank records.

Question 2

What's the minimum debt service coverage ratio for DSCR loans?

Accepted Answer

Most lenders require a DSCR of at least 1.0, meaning rental income covers all debts. Some allow 0.75 DSCR with larger down payments. The higher your ratio, the better your rate and terms.

Question 3

Are bank statement loans more expensive than DSCR loans?

Accepted Answer

Usually, yes. Bank statement loans carry higher rates because lenders see unverified income as riskier. DSCR rates depend on the property's cash flow. A strong DSCR can bring rates closer to conventional pricing.

Question 4

Do I need tax returns for either program?

Accepted Answer

No. Both programs skip traditional tax return verification. Bank statement loans use deposits; DSCR uses rental income. You may still provide returns if they help your case, but they're not required.

Question 5

Which program works for a primary residence in Compton?

Accepted Answer

Bank statement loans. DSCR loans are designed for investment properties. If you're buying a home to live in, bank statement is the right fit if you're self-employed or have irregular income.

Bank Statement vs DSCR Loans in Compton: Which Fits Your Situation?