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in Long Beach, CA
Long Beach investors and self-employed borrowers often hit the same wall with conventional loans. Your income doesn't fit the W-2 mold, so traditional underwriting shuts you out.
Bank statement and DSCR loans solve this problem differently. One qualifies you on personal cash flow, the other on rental income alone.
Both are non-QM products, which means flexibility on documentation but higher rates than conventional. The choice depends on whether you're buying a primary residence or pure investment property.
Bank statement loans qualify you by analyzing deposits over 12 to 24 months. Underwriters calculate average monthly income from your business or personal accounts.
This works for self-employed borrowers buying primary homes, second homes, or investment properties. You need consistent deposits that cover the mortgage payment plus your other debts.
Credit typically needs to be 620 or higher. Down payment starts at 10% for primary residences, 15-20% for investment properties.
Long Beach entrepreneurs and gig workers use these when tax returns show heavy write-offs that tank their stated income. Your actual cash flow matters more than what you report to the IRS.
DSCR loans qualify on one metric: does the rental income cover the mortgage payment? Underwriters calculate a ratio comparing monthly rent to the total housing expense.
Your personal income, employment, and tax returns don't matter. If the property cash flows at 1.0 DSCR or higher, you can qualify regardless of what you earn elsewhere.
These are investment property loans only. No owner occupancy allowed. Credit requirements start around 640, with 20-25% down payment standard.
Long Beach landlords building portfolios use DSCR to avoid income caps. You can own ten rental properties and still qualify for number eleven based solely on that property's rent.
The fundamental split is personal income versus property income. Bank statement loans still underwrite you as a borrower. DSCR loans underwrite the asset.
Property type determines which product you can use. Bank statement works for any occupancy type. DSCR requires non-owner-occupied rental property with a lease in place or market rent appraisal.
Portfolio building favors DSCR. Conventional and bank statement loans typically cap you at 10 financed properties. DSCR has no such limit because each property stands on its own income.
Rates vary by borrower profile and market conditions, but DSCR often prices slightly higher than bank statement. The tradeoff is zero income documentation versus detailed account analysis.
Choose bank statement if you're self-employed and buying a primary residence in Long Beach. It's your only non-QM path to owner-occupied financing without tax returns.
Choose DSCR if you're buying a rental property and want to keep your personal finances completely separate. This matters when your W-2 income is maxed out or you're scaling a portfolio quickly.
Some Long Beach investors use both. Bank statement for a primary residence duplex where they occupy one unit. DSCR for the single-family rentals they buy across the city.
The wrong choice costs you. Trying to force a bank statement loan on a pure investment play means unnecessary income documentation. Using DSCR when you need owner occupancy disqualifies you immediately.
Yes, bank statement loans work for investment properties. You'll need 15-20% down and your personal income must support the debt load.
Not always. If the property is vacant, appraisers provide a market rent estimate that underwriters use to calculate DSCR.
Bank statement loans often price slightly better than DSCR. Rates vary by borrower profile and market conditions.
Correct. DSCR loans require zero personal income verification. The property's rental income is the only qualification factor.
Most lenders require 1.0 or higher, meaning rent covers the mortgage payment. Some allow 0.75 DSCR with larger down payments.
Yes. Bank statement covers 1-4 units with owner or non-owner occupancy. DSCR covers 1-4 unit investment properties only.