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in Monrovia, CA
Self-employed borrowers and real estate investors in Monrovia often hit walls with conventional loans. Bank statement and DSCR loans solve different problems for different buyers.
Bank statement loans work for business owners buying a primary residence or second home. DSCR loans work for investors focused purely on rental property cash flow.
Both skip W-2 income verification, but they verify ability to pay in completely different ways. Choosing wrong costs you time and a hard credit pull.
Bank statement loans use 12 to 24 months of personal or business bank deposits to calculate income. Underwriters add up deposits, subtract obvious transfers, and apply a percentage to estimate taxable income.
Most lenders use a 50% expense ratio for personal accounts and 25% for business accounts. If your business account shows $20,000 monthly deposits, they'll count $15,000 as income.
You need 10-20% down depending on credit and property type. Credit minimums run 620-680 depending on the lender and loan amount.
These loans work for primary homes, second homes, and investment properties. You're qualifying based on your ability to repay, not rental income.
DSCR loans qualify you based solely on the rental property's income compared to its monthly debt. No personal income verification at all—your tax returns and pay stubs don't matter.
The lender divides projected rent by the total monthly payment (PITI). A ratio above 1.0 means the property covers its own costs. Most lenders want 1.0 to 1.25 minimum.
You need 20-25% down for single-family rentals in Monrovia. Credit minimums typically start at 660, though some lenders go to 620 with higher rates.
These are investment-only loans. You cannot use DSCR financing for a primary residence or second home—only rental properties generating income.
Bank statement loans verify your income through deposits. DSCR loans ignore your income entirely and look only at the property's rental performance.
If you're buying a home to live in while running a business, bank statement is your only option. DSCR loans won't touch owner-occupied properties.
DSCR loans often close faster because there's less documentation. No need to explain business deposits, transfers, or write letters about large transactions.
Rates vary by borrower profile and market conditions, but DSCR loans sometimes price better for strong rental properties with high cash flow. Bank statement pricing depends heavily on credit and down payment.
Choose bank statement loans if you're self-employed and buying a home to live in. Also pick this if you're buying a rental but your business income is strong and verifiable through deposits.
Choose DSCR if you're a real estate investor buying rental property and the numbers work on rent alone. This is especially useful if your personal tax returns show losses or low income.
DSCR makes sense for Monrovia investors building a portfolio without employment verification slowing them down. Bank statement fits local business owners who write off everything and can't show tax return income.
Some borrowers qualify for both. In that case, run the numbers with your broker—compare rates, down payments, and which documentation package you can pull together faster.
Yes, bank statement loans work for investment properties. But you're qualifying on your business income through deposits, not the rental income itself.
No. DSCR loans don't verify personal income at all, so tax returns aren't part of the underwriting process.
Bank statement loans sometimes go as low as 10% down. DSCR loans typically require 20-25% down for rental properties.
Absolutely. Use bank statement for your primary residence and DSCR for rental properties. Each loan is evaluated separately.
DSCR loans often close quicker due to simpler documentation. Bank statement loans require more time to review and verify deposit activity.