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in Monterey Park, CA
Both bank statement and DSCR loans skip traditional W-2 income verification, but they serve different borrowers. One qualifies you based on your business cash flow, the other on your rental property's numbers.
Monterey Park investors and business owners use these non-QM options when conventional loans don't fit. The right choice depends on whether you're buying your own residence or an investment property.
Bank statement loans use 12 to 24 months of business or personal bank deposits to calculate your income. Lenders typically count 50% of deposits as qualifying income after expenses.
This works for business owners, freelancers, and 1099 contractors buying primary residences or second homes. You avoid tax returns, profit-and-loss statements, and the documentation headaches that kill most self-employed applications.
Credit scores start at 620, though better terms kick in above 680. Down payments run 10-20% depending on property type and credit profile.
DSCR loans qualify you based solely on rental income versus the property's mortgage payment. Your personal income doesn't matter—lenders only care if the rent covers the debt.
The property must generate enough rental income to produce a debt service coverage ratio above 1.0, meaning rent exceeds the full mortgage payment. Most lenders want to see 1.15 to 1.25 DSCR for best pricing.
These loans only work for investment properties—you can't live there. Credit requirements start at 620, with 20-25% down payments standard across most programs.
The core split: bank statement loans fund homes you'll live in, DSCR loans fund properties you'll rent out. That distinction drives every other difference between them.
Bank statement loans examine your business cash flow and personal finances. DSCR loans ignore your income entirely and focus on whether the property pays for itself through rent.
Interest rates and terms overlap significantly since both are non-QM products. Rates vary by borrower profile and market conditions, but expect similar pricing between the two when credit scores and down payments align.
If you're self-employed and buying a home to live in around Monterey Park, bank statement is your path. DSCR won't work because you can't occupy the property.
Real estate investors should default to DSCR when the numbers work—no income documentation saves time and protects privacy. Switch to bank statement only if you're buying a rental but the rent doesn't cover the payment.
Some borrowers qualify for both on the same investment property. Run the numbers each way—DSCR typically wins when rents are strong, bank statement wins when rents fall short but your business income is solid.
Yes, bank statement loans work for investment properties. You just need to show business income through your bank deposits instead of relying on the rental income alone.
Most lenders require 1.0 minimum, meaning rent equals the mortgage payment. Better rates typically require 1.15 to 1.25 DSCR or higher.
Rates are similar since both are non-QM products. Your credit score, down payment, and property details matter more than the program type.
Yes, both require full appraisals. DSCR loans also need a rent schedule or market rent analysis to verify the property's income potential.
DSCR never requires personal tax returns. Bank statement loans skip tax returns too—you just provide 12 to 24 months of bank statements instead.