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in La Mirada, CA
La Mirada investors face a choice between conventional loans and DSCR financing. Conventional requires W-2 income and personal debt ratios. DSCR qualifies you on the rental property's cash flow alone.
Most owner-occupants pick conventional for lower rates. Real estate investors with multiple properties or complex tax returns lean toward DSCR to skip income verification.
Conventional loans offer the lowest rates and fees when you qualify. You need 620+ credit, proof of W-2 or 1099 income, and debt-to-income under 50%. Fannie and Freddie set the rules, so underwriting is predictable.
Down payments start at 3% for owner-occupied homes, 15% for investment properties. You'll need two years of tax returns, recent pay stubs, and bank statements. Rates vary by borrower profile and market conditions.
DSCR loans ignore your personal income entirely. Lenders approve you based on the property's rent divided by its monthly debt. A ratio above 1.0 means the rent covers the mortgage payment, insurance, taxes, and HOA fees.
You need 20-25% down and 680+ credit. No tax returns, no pay stubs, no employment verification. This works for self-employed borrowers, retirees with rental income, or investors who write off most of their W-2 income.
Rates on conventional loans run 6-7% for strong borrowers. DSCR adds 0.5-1.5% to that baseline because lenders take more risk without income docs. You pay for the flexibility.
Conventional underwriting takes 3-4 weeks with full document review. DSCR closes faster—sometimes in 2-3 weeks—because there's no employment or tax verification. You trade rate for speed and simplicity.
Pick conventional if you're buying a primary residence or have clean W-2 income. You'll get better rates and lower down payments. It's the default choice for most La Mirada homebuyers.
Choose DSCR if you own multiple rentals, show low taxable income, or can't document traditional employment. The higher rate is worth it when conventional underwriting would decline you. DSCR also works for fast portfolio scaling without income limits.
No. DSCR loans only finance investment properties. You need conventional, FHA, or VA financing for a primary home.
Conventional starts at 620 but most investors need 680+ for rental properties. DSCR requires 680 minimum with no exceptions.
They divide monthly market rent by the total debt service. A 1.0 ratio means rent exactly covers the payment—most lenders want 1.1 or higher.
DSCR typically closes in 2-3 weeks versus 3-4 weeks for conventional. No income verification means fewer conditions and faster underwriting.
Yes. Many investors refinance into DSCR once they own multiple properties and want to avoid income documentation on future purchases.