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in Glendale, CA
Conventional loans fund primary homes and investment properties using your W-2 income. DSCR loans qualify you based solely on rental income from the property itself.
Most Glendale buyers choose conventional for owner-occupied homes. Investors with multiple properties or complex tax returns prefer DSCR to avoid income verification.
The gap between these programs is massive. One requires tax returns, pay stubs, and employment verification. The other skips all of that and just looks at projected rent.
Conventional loans offer the lowest rates and best terms for borrowers with strong credit and stable income. You'll need two years of tax returns, recent pay stubs, and proof of assets.
Down payments start at 3% for primary homes and 15% for investment properties. Expect rates 0.5-1% lower than DSCR loans when you qualify.
These loans max out at $766,550 in Los Angeles County for 2024 conforming limits. Above that, you need a jumbo conventional with stricter requirements.
DSCR loans ignore your W-2, tax returns, and employment history. Lenders only care whether the rental income covers the mortgage payment plus property expenses.
You need the property to generate enough rent to produce a DSCR ratio above 1.0. Most lenders want 1.25, meaning rent exceeds the full housing payment by 25%.
Expect 20-25% down, higher rates than conventional, and faster closings since there's no income verification. These work for Glendale multi-units or single-family rentals.
Conventional requires full documentation of personal income. DSCR skips that entirely and underwrites the property's rental income instead.
Rates matter more than most borrowers think. A 1% rate difference on a $600,000 Glendale property costs you $6,000 per year in interest.
Conventional loans allow lower down payments for owner-occupants. DSCR programs start at 20% down regardless of occupancy because they're investor-only products.
Processing timelines flip the script. Conventional takes longer due to employment verification and income analysis. DSCR closes faster without that paperwork.
Choose conventional if you're buying a primary home or have straightforward W-2 income. The rate savings alone justify the extra documentation for most Glendale buyers.
DSCR makes sense when you own multiple rentals and your tax returns show minimal income after deductions. It also works for foreign nationals or self-employed borrowers who can't document income easily.
I also push clients toward DSCR when they want to close in under 20 days. Skip income verification and you can fund fast on time-sensitive Glendale investment deals.
No. DSCR loans are investment property only. You must use conventional, FHA, or another owner-occupant program for your primary home.
Conventional typically requires 620-640 minimum. DSCR lenders want 660-680 due to the higher risk of no income verification.
Most use an appraisal with a rent schedule showing market rent. They divide that rent by the full housing payment to get your DSCR ratio.
You'd need to refinance into a DSCR loan. There's no automatic conversion, and you'd pay closing costs again to switch programs.
DSCR has no hard limit on financed properties. Conventional caps at 10 financed properties total across your portfolio.