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in Downey, CA
Downey investors and self-employed borrowers face the same challenge: traditional mortgage underwriting doesn't capture their income. Bank statement and DSCR loans solve that problem in different ways.
Bank statement loans work for business owners who need to show income from their operations. DSCR loans ignore personal income entirely and focus on what the rental property generates.
Both are non-QM products with similar credit and down payment requirements. The right choice depends on whether you're buying your own home or an investment property.
Bank statement loans analyze 12 to 24 months of business or personal bank deposits to calculate income. Underwriters apply a percentage to your average monthly deposits after removing transfers and one-time events.
This works for self-employed borrowers buying primary residences, second homes, or investment properties. You need consistent deposits that demonstrate ability to cover the new mortgage payment.
Most bank statement programs require 10-20% down and credit scores starting at 620. Rates run higher than conventional loans because lenders price in the non-traditional documentation.
DSCR loans qualify you based entirely on rental income from the property you're buying. Lenders calculate the debt service coverage ratio by dividing monthly rent by the monthly mortgage payment.
Most programs want a DSCR of at least 1.0, meaning rent covers the full payment. Some lenders go down to 0.75 if you put more money down and have strong credit.
These loans only work for investment properties, never owner-occupied homes. You don't provide tax returns, pay stubs, or employment verification. The property income is what matters.
The main split is occupancy. Bank statement loans work for any property type including your primary residence. DSCR loans only finance rentals.
Income source matters too. Bank statement loans require you to have income from business operations or self-employment. DSCR loans don't care about your income at all—only what the property generates.
Documentation differs significantly. Bank statement loans need 12-24 months of statements showing deposits. DSCR loans need a lease agreement or rent schedule to verify property income.
Both charge similar rates since they're non-QM products. Down payment requirements overlap at 15-25% depending on credit and property type.
Choose bank statement loans if you're self-employed and buying a home to live in. Also use them for investment properties when your personal income helps qualification or the rental income alone won't support the loan.
Pick DSCR loans when you're buying Downey rental property and want the simplest path to approval. They work best for investors with multiple properties who don't want to show tax returns.
Some borrowers qualify for both. The deciding factor is usually whether you need to prove personal income or prefer to keep your financials private and let the property qualify itself.
Yes, bank statement loans work for investment properties. You'll qualify based on your business income shown through deposits, not the rental income from the property.
No, both typically require 15-25% down. The exact amount depends on your credit score, the property type, and the specific lender's requirements.
Rates are similar since both are non-QM loans. Your credit score and down payment affect your rate more than which program you choose.
Yes, neither requires tax returns. Bank statement loans use deposit history instead, while DSCR loans only verify the property's rental income.
Most lenders start at 620 for both programs. Higher scores above 680 get you better rates and more lender options.