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in Compton, CA
Compton's housing market attracts both owner-occupants and rental property investors. The loan you choose depends on whether you're buying to live there or renting it out.
Conventional loans serve traditional buyers with W-2 income. DSCR loans work for investors who want approval based on rental income, not tax returns.
Conventional loans require proof of personal income through tax returns and pay stubs. You'll need a 620+ credit score for most lenders, 3-20% down depending on occupancy.
Rates are typically lower than investor products. You can use these for primary homes, second homes, or investment properties with stricter debt-to-income requirements.
DSCR loans ignore your personal income entirely. Lenders approve you based on the property's rental income compared to the mortgage payment.
You need 20-25% down and stronger credit than conventional. But if your tax returns show low income due to write-offs, DSCR avoids that problem completely.
The qualification method splits these loans apart. Conventional uses your personal debt-to-income ratio. DSCR uses the property's debt service coverage ratio — monthly rent divided by the mortgage payment.
Down payments differ too. Conventional allows 3% down for owner-occupants. DSCR requires 20-25% regardless of property use. Rates vary by borrower profile and market conditions, but DSCR typically costs more.
Choose conventional if you're buying a primary home or have clean W-2 income. It's cheaper and allows lower down payments for owner-occupants.
Pick DSCR if you're buying a rental property and your tax returns don't reflect true income. Self-employed investors with heavy write-offs qualify easier with DSCR despite higher costs.
Yes, but you'll need 20-25% down and the rent must cover the mortgage payment. Most lenders want a 1.0+ DSCR ratio.
Conventional loans typically offer rates 0.5-1.5% lower than DSCR. Rates vary by borrower profile and market conditions.
No. DSCR lenders approve based on the property's rental income, not your personal tax returns or W-2s.
Yes, but you'll need two years of tax returns showing sufficient income. DSCR skips this if the property rent qualifies.
Conventional requires 620+ for most programs. DSCR typically needs 660-680 minimum depending on the lender.