Loading
in Hawaiian Gardens, CA
Hawaiian Gardens investors face a clear choice: conventional loans for owner-occupants and primary residence investors, or DSCR loans for pure rental plays. The right pick depends on whether you can prove W-2 income or prefer the property to qualify itself.
Conventional loans dominate the primary residence market with lower rates and smaller down payments. DSCR loans serve investors who own multiple properties or run businesses with complex tax returns that hide their true income.
Conventional loans require full income documentation—pay stubs, W-2s, tax returns. You need a 620 credit score minimum, though 740+ unlocks the best pricing. Down payments start at 3% for owner-occupants, 15% for investment properties.
These loans cap at $766,550 in Los Angeles County for conforming limits. Debt-to-income ratios max out around 50%, meaning your monthly debts can't exceed half your gross income. Rates beat most alternatives by 0.5-1.5 percentage points.
DSCR loans ignore your W-2 income entirely. Lenders underwrite based on the property's rental income divided by the mortgage payment. A ratio above 1.0 means the rent covers the debt. Most lenders want 1.25 or higher, but we have programs that go lower.
Expect 20-25% down minimum and rates 1-2% above conventional. No income verification means no tax returns, no pay stubs, no employment letters. Credit score minimums sit around 620-660 depending on the lender and down payment size.
Income verification separates these products completely. Conventional loans dissect your financial life—every deposit, every write-off, every 1099. DSCR lenders pull a credit report and order an appraisal with a rent schedule. That's mostly it.
Rate差 runs 1-2% in DSCR's favor—or rather, against it. On a $500,000 loan, that's $400-800 more per month. But if your CPA writes off $100,000 in depreciation annually, conventional lenders count that against your income. DSCR lenders don't care what your tax return says.
Buy your primary residence with conventional. The rate savings compound over 30 years into six figures. Only exception: you're self-employed with massive write-offs that tank your qualifying income but you're actually cash-flow positive.
Use DSCR for second homes, investment properties when you already own several, or any rental where showing income creates problems. We also see buyers use DSCR for speed—closing in 15 days instead of 30 because there's less paperwork to chase down.
No. DSCR loans require the property to generate rental income. If you're living there, it's not producing the rent needed to qualify.
Most lenders want 1.25 or higher, meaning rent covers 125% of the payment. We have programs down to 0.75 with bigger down payments and strong credit.
Some do, typically 3-5 years of soft prepays where you can sell but not refinance. Always check terms before locking—we have no-penalty options too.
You'd refinance from one to the other. Makes sense if you convert your primary to a rental and want to buy another home without counting both payments.
DSCR typically closes 3-7 days faster due to lighter documentation. Conventional requires more verification steps that add time even when everything's ready.