Loading
in Huntington Park, CA
Both bank statement and DSCR loans bypass traditional W-2 income verification, but they're built for different borrowers. One qualifies you based on personal deposits, the other on rental income alone.
In Huntington Park's investor-heavy market, choosing the wrong product costs you either higher rates or an approval delay. Most brokers push whichever loan their lender prefers—we shop 200+ options to find what actually works for your situation.
Bank statement loans analyze 12 to 24 months of business or personal bank deposits to calculate qualifying income. Lenders apply an expense ratio—typically 25% to 50%—then use the net figure for debt-to-income ratios.
These work best for self-employed borrowers buying primary homes, second homes, or investment properties when you need to prove personal income capacity. Credit requirements start around 620, and you'll need reserves covering 6 to 12 months of payments.
DSCR loans ignore your personal income completely and qualify you based solely on rental property cash flow. Lenders divide monthly rent by the monthly mortgage payment—a ratio above 1.0 means the property covers itself.
Investment properties only—no primary or second homes allowed. Most lenders accept ratios as low as 0.75 if you compensate with higher down payments or reserves. Credit minimums hover around 640, with better terms at 680 and above.
Bank statement loans verify your ability to pay from any income source—business profits, 1099 work, cash flow. DSCR loans verify the property's ability to pay for itself. If you're buying a rental, bank statements tie up your personal debt ratios; DSCR keeps your income free for other deals.
Rates on DSCR loans typically run 0.25% to 0.75% higher than bank statement loans because lenders price in tenant vacancy risk. But DSCR loans close faster—no tax returns, no profit and loss statements, no explaining irregular deposits. Just an appraisal with a rent schedule.
Use bank statement loans when you're self-employed and buying a home you'll live in, or when rental income alone won't clear DSCR hurdles. Use DSCR when you're scaling a rental portfolio and don't want every new mortgage dragging down your personal debt ratios.
Many Huntington Park investors hold multiple properties. DSCR loans let you keep stacking acquisitions without hitting debt-to-income ceilings. But if the property needs work before it rents at market rates, bank statements give you time to stabilize cash flow.
Yes—many investors use DSCR for rentals and bank statements for a primary residence. Each loan evaluates income differently, so they don't conflict.
DSCR loans typically close 5 to 7 days faster because they skip tax return reviews and income calculations. Bank statement underwriting takes longer to verify deposits.
Minimums vary by lender. Bank statement loans on primary homes start at 10% down; DSCR investment loans typically require 20% to 25%.
DSCR loans generally want 640 minimum, while bank statement loans accept 620. Both price better terms at 680 and above.
Yes—common move is refinancing a bank statement loan into DSCR once the property generates steady rental income. Rates vary by borrower profile and market conditions.