Loading
in Hawaiian Gardens, CA
Hawaiian Gardens borrowers who don't fit conventional guidelines have two strong non-QM options. Bank statement loans work for business owners showing income through deposits, while DSCR loans qualify you based purely on rental property cash flow.
Both skip W-2s and tax returns, but they serve different purposes. One proves your earning power, the other proves a property pays for itself.
Bank statement loans use 12 or 24 months of business or personal bank deposits to calculate income. Lenders apply a percentage to your average monthly deposits—typically 50% for business accounts, 100% for personal—to determine what you qualify for.
This works for contractors, consultants, shop owners, or anyone whose 1040 doesn't reflect true earnings due to write-offs. Credit minimums start at 620, and you'll need 10-20% down depending on property type and deposit strength.
DSCR loans ignore your income entirely. Approval hinges on one number: the property's monthly rent divided by its monthly debt obligations (mortgage, taxes, insurance, HOA).
A ratio above 1.0 means the property covers its own costs. Most lenders want to see 1.0 to 1.25, though some approve lower ratios with bigger down payments. Credit minimums start at 620-640, and you'll typically put down 20-25%.
The biggest split: bank statement loans prove you can afford the payment, DSCR loans prove the property can. If you're buying a primary residence or second home, only bank statements work—DSCR is investment property only.
Rate-wise, both price similarly as non-QM products, typically 1-2 points above conventional. Bank statement loans require more documentation upfront (all those statements), while DSCR deals move faster with just a lease or rental appraisal.
Choose bank statement loans if you're self-employed and buying a home to live in, or if your rental property doesn't generate enough income to hit DSCR minimums. This option works when your personal earning power is stronger than the property's cash flow.
Go DSCR if you're building a rental portfolio and don't want loan approvals tied to your personal income. This keeps your debt-to-income ratio clean for future deals and works especially well when acquiring multiple properties quickly.
Yes, bank statements work for any property type. But if it's a rental generating solid income, DSCR usually offers a cleaner approval path with less documentation required.
Most lenders want 1.0 or higher, meaning rent covers the full mortgage payment. Some approve 0.75 ratios with 25-30% down and strong credit scores.
Rates are comparable since both are non-QM products. Your credit score and down payment affect pricing more than the specific loan type you choose.
No. Bank statement loans replace tax returns with deposit history, while DSCR loans skip personal income review entirely and focus on property cash flow.
Absolutely. Many investors use DSCR for rentals to preserve DTI, then use bank statements when buying a primary residence to live in themselves.