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in El Monte, CA
El Monte borrowers often need alternatives to traditional income verification. Bank statement loans work for self-employed operators with strong deposits but no tax returns. DSCR loans ignore your W-2 entirely and qualify you based on what the rental property generates.
Both are non-QM products that skip the usual DTI calculations. The difference comes down to how you make money and what you're buying. One uses your business income. The other uses the property's rent.
Bank statement loans qualify you using 12 to 24 months of personal or business bank deposits. We calculate your income from average monthly deposits, then apply standard debt-to-income rules. You need consistent deposits and at least 10% down, often more.
This works for contractors, consultants, and small business owners who write off most of their income. Your tax returns show low earnings, but your bank account tells the real story. Rates run 1-2% above conventional, varying by credit and down payment.
DSCR loans qualify based on the property's rental income compared to its debt. We pull a rent appraisal, divide projected rent by the monthly payment, and look for a ratio above 1.0. Your W-2, 1099s, and tax returns don't matter at all.
This is strictly for investment properties, not primary residences. You need 20-25% down and decent credit, usually 640 minimum. El Monte's rental market supports strong DSCR ratios on single-family homes and small multifamily properties. Rates run similar to bank statement loans.
Bank statement loans look at your business income. DSCR loans look at the property's income. If you're buying a primary residence or second home in El Monte, only bank statements work. DSCR requires an investment property with rental potential.
Down payment requirements differ slightly. Bank statements can go as low as 10% with strong credit and deposits. DSCR typically starts at 20% and goes higher for lower credit scores or weaker ratios. Both need 620-640 minimum credit, though better scores unlock better rates.
Choose bank statement loans if you're self-employed and buying a home to live in. This works for El Monte business owners, freelancers, or contractors who need primary residence financing without tax return scrutiny. You need steady deposits and reasonable debt ratios.
Pick DSCR if you're buying rental property and want to skip income verification entirely. This fits investors adding to their portfolio or first-time landlords who can't qualify traditionally. The property carries itself — your job income never enters the equation.
Yes, bank statement loans work for investment properties. But DSCR often makes more sense because it ignores your personal income entirely and just uses the rent.
Rates are similar, typically 1-2% above conventional for both programs. Your credit score and down payment matter more than which program you choose.
No. Bank statement loans replace tax returns with deposit history. DSCR loans skip personal income verification completely and qualify on property cash flow.
Both typically require 620-640 minimum. Higher scores unlock better rates and lower down payments on either program.
You can use different programs for different deals. Many El Monte investors use DSCR for rentals and bank statements for their primary residence.