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in La Verne, CA
Most La Verne borrowers who can't show W-2s end up choosing between bank statement loans and DSCR loans. Both skip traditional income verification, but they solve different problems.
Bank statement loans work for self-employed borrowers buying a primary residence or investment property. DSCR loans only work for rental properties where the deal lives or dies on rent roll.
Bank statement loans analyze 12 to 24 months of business or personal bank deposits to calculate your income. Lenders apply a percentage to your average monthly deposits, usually 50-75% to account for business expenses.
You can use these loans for primary homes, second homes, or investment properties in La Verne. Credit requirements start around 620, though most competitive deals need 680 or better.
Expect rates 1-3% higher than conventional loans. Rates vary by borrower profile and market conditions. The trade-off is qualifying without tax returns that show reduced income from write-offs.
DSCR loans ignore your personal income entirely. The lender only cares whether the property's rent covers the mortgage payment, taxes, insurance, and HOA fees.
You need a DSCR ratio of at least 1.0, meaning rent equals expenses. Most lenders want 1.25, where rent exceeds the monthly nut by 25%. No tax returns, no pay stubs, no employment verification.
These only work for investment properties, never primary residences. La Verne rental properties must produce enough rent to satisfy the ratio, which can be tight in slower rental markets.
Bank statement loans require proving you earn enough through deposits. DSCR loans require proving the property earns enough through rent. That's the core split.
Bank statement loans work for any property type you want to buy or refinance. DSCR loans only work for rental properties, which limits your options in La Verne's mixed residential market.
Credit standards differ too. Bank statement loans lean on your credit profile more heavily. DSCR loans care more about down payment size and the property's rental performance.
Choose bank statement loans if you're buying a La Verne home to live in or if you're an investor who also needs to qualify for personal properties. You need consistent deposits to prove income stability.
Choose DSCR loans if you're only buying La Verne rental properties and the rent easily covers the payment. This works best when you have solid reserves and don't want to expose personal financials.
DSCR loans close faster because underwriters skip personal income analysis. Bank statement loans take longer but open more property options. Most self-employed investors should have access to both.
Yes, bank statement loans work for investment properties. You'll qualify based on your business deposits, not the rental income.
Most lenders require 1.0 to 1.25. That means monthly rent must equal or exceed the full housing payment by 25%.
Neither consistently wins. Rates vary by borrower profile and market conditions. DSCR rates often price better with larger down payments.
No. Bank statement loans use 12-24 months of deposits instead. DSCR loans skip personal income verification completely.
Yes. Use DSCR for pure rentals and bank statement for properties you'll occupy or that don't cash flow well.