Question 1

Can I use DSCR to buy a home I'll live in?

Accepted Answer

Yes. DSCR works for owner-occupied homes if your business cash flow is strong. You'll pay a higher rate and put 20% down, but you avoid the W-2 income requirement. It's useful when your business income exceeds your salary.

Question 2

Do I need 20% down on a conventional loan?

Accepted Answer

No. Conventional loans accept 3% down, but mortgage insurance applies until you reach 20% equity. The lower your down payment, the higher your monthly MI cost. At 5% down, MI can add $200 to $400 per month depending on the loan size.

Question 3

Which loan is faster to close?

Accepted Answer

Conventional typically closes in 30 to 45 days. DSCR can take 45 to 60 days because lenders spend more time analyzing property cash flow. If speed matters, conventional has the edge.

Question 4

Can I refinance from DSCR to conventional later?

Accepted Answer

Yes, if you move into the property as your primary residence and your personal income qualifies. You'd refinance to a conventional loan and potentially lower your rate. Plan on 30 to 45 days for the refi to close.

Question 5

What credit score do I need for DSCR?

Accepted Answer

Most DSCR lenders accept 640 to 660 as a floor. Conventional typically wants 620 minimum but rewards 740+ with better rates. DSCR is more forgiving on credit if your property cash flow is solid.

Conventional vs DSCR Loans in Manhattan Beach