Loading
in Maywood, CA
Maywood investors face a clear choice: qualify with your W-2 income or let the property pay its own way. Conventional loans demand clean tax returns and steady paychecks. DSCR loans ignore your personal income entirely.
Most Maywood rental buyers start with conventional financing, then switch to DSCR after realizing their DTI won't work. We've seen this pattern hundreds of times across Los Angeles County properties.
Conventional loans offer the lowest rates you'll find for rental properties. You need 15-20% down for investment properties and credit above 620. Your debt-to-income ratio must stay under 50% including the new mortgage payment.
Lenders verify everything: tax returns, W-2s, pay stubs, bank statements. If you've got stable employment and clean financials, conventional beats DSCR on rate every time. Expect rates 0.5-1% lower than DSCR options.
DSCR loans qualify on rental income alone. The property must generate enough rent to cover its mortgage payment by at least 1.0x. No tax returns. No pay stubs. No explaining your self-employment deductions.
You'll pay 20-25% down and rates run higher than conventional. But if your personal income looks messy on paper or you already own multiple rentals, DSCR keeps you buying. We close these in Maywood all the time for investors maxed out on conventional financing.
Rate difference matters more than investors think. A 1% rate gap on a $500K Maywood duplex costs $5,000 annually. Run the math on your actual property before assuming DSCR is your only path.
Conventional has hard DTI limits. DSCR has hard rent coverage limits. If you're W-2 employed with good credit, conventional saves money. If you're self-employed or own four rentals already, DSCR keeps you moving.
Choose conventional if your DTI allows it and you want the best rate. Choose DSCR if you're self-employed, write off lots of business expenses, or already own multiple investment properties. Your tax strategy often decides this for you.
Most Maywood investors buying their first rental qualify conventionally. By property three or four, they switch to DSCR because their DTI won't stretch further. We help you max out conventional limits first, then shift to DSCR when it makes sense.
Yes, lenders use an appraisal that includes market rent analysis. The appraiser determines fair market rent for the property based on comparable Maywood rentals.
Most DSCR loans carry prepayment penalties for 1-5 years. Conventional investment property loans typically don't have prepayment penalties.
DSCR loans often close faster because there's no income verification. Conventional requires full documentation review which adds time to underwriting.
Yes, DSCR cash-out refinances work well for pulling equity from performing rentals. The property just needs to support its new larger payment with rent.
Some lenders accept 0.75-1.0 DSCR with larger down payments or reserves. Below that, conventional financing with your income becomes necessary.