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in Rolling Hills, CA
Rolling Hills investors face a choice: traditional conventional financing or DSCR loans built for rental property cash flow. The right option depends on whether you're buying a primary residence or an investment property.
Conventional loans rely on your W-2 income and credit profile. DSCR loans ignore your tax returns entirely and qualify you based on what the property can earn in rent.
Conventional loans offer the lowest rates in the market, typically 0.5-1% below DSCR pricing. You need a 620+ credit score, full tax returns, and enough documented income to cover all your debts plus the new mortgage.
Down payments start at 3% for primary residences and 5% for second homes. Investment properties require 15-25% down depending on credit and reserves. Rates vary by borrower profile and market conditions.
DSCR loans qualify you using only the property's rental income versus its mortgage payment. No tax returns, no W-2s, no income verification. The property either covers its debt or it doesn't.
You need a 680+ credit score and 20-25% down payment. Lenders calculate a debt service coverage ratio by dividing monthly rent by the total housing payment. A ratio above 1.0 means the property pays for itself.
The rate spread matters. Conventional loans price 0.5-1% lower, which adds up over 30 years on Rolling Hills properties. But DSCR loans don't care if you're self-employed, show low taxable income, or already own multiple rentals.
Conventional loans cap you at 10 financed properties. DSCR loans have no portfolio limits. Conventional requires two years of landlord experience for best pricing. DSCR accepts first-time investors if the numbers work.
Choose conventional if you have steady W-2 income, clean tax returns, and want the lowest possible rate. This works for primary residences and your first few investment properties. The savings on rate typically outweigh any inconvenience in documentation.
Choose DSCR if you're self-employed with heavy write-offs, building a large rental portfolio, or can't document traditional income. Pay slightly more in rate to bypass income verification entirely. Properties in Rolling Hills rent well enough to support strong DSCR ratios.
No. DSCR loans only work for investment properties that generate rental income. Primary residences require conventional or government-backed financing.
Conventional loans start at 620 credit. DSCR loans require 680 minimum, with best pricing at 720+.
They divide monthly market rent by your total housing payment including principal, interest, taxes, insurance, and HOA. Above 1.0 means the property covers itself.
Conventional loans price 0.5-1% below DSCR. Rates vary by borrower profile and market conditions.
Yes. You can refinance a conventionally financed rental into a DSCR loan anytime. Many investors do this to free up qualifying income for the next purchase.