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in Covina, CA
Both Bank Statement and DSCR loans skip the W-2 income verification that blocks most self-employed borrowers and investors. The difference comes down to whether you're buying for personal use or rental income.
Covina's mix of single-family homes and investment properties creates demand for both loan types. Choosing between them depends on how you'll use the property and where your money comes from.
Bank Statement loans use 12 to 24 months of business or personal bank deposits to calculate your income. Lenders average your monthly deposits and apply an expense ratio to determine what you qualify for.
This works for self-employed borrowers buying a primary home, second home, or investment property. You need consistent deposits and reasonable debt-to-income ratios, but no tax returns or pay stubs.
DSCR loans qualify you based on the rental property's income, not yours. Lenders divide the monthly rent by the mortgage payment to get a ratio. Most want to see 1.0 or higher, meaning rent covers or exceeds the payment.
Your personal income doesn't matter. You could have zero W-2 income or be a high earner with complex tax strategies. The property's cash flow is what gets you approved.
Bank Statement loans look at your business deposits. DSCR loans look at the rental property's income. If you're buying a home to live in, Bank Statement is your only option since DSCR requires a rental property.
Bank Statement borrowers need provable cash flow through their accounts. DSCR borrowers need a property that rents for enough to cover the mortgage. Rates vary by borrower profile and market conditions, but DSCR rates often run slightly higher due to investor risk.
Use Bank Statement loans when you're self-employed and buying a home to live in, or when your business income is strong but doesn't show well on tax returns. This loan makes sense for contractors, business owners, and 1099 earners in Covina.
Use DSCR loans when you're buying a rental property and don't want to verify personal income. It's the better choice for investors with multiple properties, retirees living off investments, or anyone whose tax strategy minimizes reported income.
Yes. Bank Statement loans work for investment properties, but you'll still need to document your personal income through deposits. DSCR is simpler for rentals since it ignores your income entirely.
Bank Statement loans typically price slightly better than DSCR because they verify borrower income. Rates vary by borrower profile and market conditions, so compare both options with current quotes.
Most lenders want 620 minimum for Bank Statement loans. DSCR lenders often accept similar scores but may price better at 680 or higher.
Yes. DSCR loans don't verify personal income at all. As long as the rental property's income covers the mortgage payment, your personal situation doesn't matter.
Both take similar time since they're non-QM products. DSCR can be slightly faster because there's no income verification, just a rental analysis and appraisal.