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in Culver City, CA
Culver City's tight housing market attracts both self-employed buyers and real estate investors. Both groups often get turned down for conventional loans despite strong financials.
Bank statement loans work for self-employed buyers purchasing their own home. DSCR loans work for investors buying rentals. Same problem solved two different ways.
Bank statement loans verify income through 12 or 24 months of business or personal bank deposits. Lenders calculate average monthly deposits and apply a percentage based on your business structure.
You need 10-20% down depending on credit score and property type. Credit scores start at 600 but most approvals happen at 660+. Rates run 1-2% higher than conventional.
This loan works for business owners, freelancers, and 1099 contractors buying a primary residence or second home. You must show consistent deposits and reasonable cash flow.
DSCR loans ignore your personal income completely. Approval depends on whether the rental property generates enough income to cover its own mortgage payment.
Lenders want a DSCR ratio of 1.0 or higher, meaning rent covers the full mortgage payment. Some lenders go down to 0.75 if you put more money down. You need 20-25% down minimum.
This loan works for investors with multiple properties, high earners who maxed out DTI, or buyers purchasing their first rental. No tax returns or pay stubs required.
Bank statement loans look at your income. DSCR loans look at the property's income. That's the fundamental split.
Bank statement loans work for owner-occupied properties where you'll live. DSCR loans only work for investment properties you'll rent out. You cannot use DSCR for your primary residence.
Bank statement loans require proof of self-employment income through deposits. DSCR loans require a lease agreement or rental market analysis showing the property generates enough rent. Different documents, different approval process.
Choose bank statement loans if you're self-employed and buying a home to live in. This loan type replaced the primary residence barrier that kept business owners out of conventional financing.
Choose DSCR loans if you're buying an investment property in Culver City's rental market. Your personal income and tax deductions don't matter. The rent number is what gets you approved.
Some borrowers qualify for both but can only use one per transaction. If you're buying a duplex to house hack, bank statement loans let you occupy one unit. Pure investment plays go DSCR.
Not on the same property. You use bank statement for owner-occupied purchases and DSCR for investment properties. Many investors use both across different purchases.
Rates vary by borrower profile and market conditions. Both typically run 1-2% above conventional rates. DSCR rates depend on rental coverage and down payment size.
No. Bank statement loans replace tax returns with deposit history. DSCR loans don't look at personal income at all, so tax returns aren't part of underwriting.
Yes. Investors often buy with bank statement loans then refinance to DSCR once they move out and convert to rental. The property use determines which loan fits.
DSCR loans typically close faster because they skip personal income verification. Bank statement loans need time to review 12-24 months of deposit records and calculate qualifying income.