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in Rosemead, CA
Most Rosemead borrowers who can't document traditional W-2 income end up choosing between bank statement loans and DSCR loans. Both are non-QM products, but they solve completely different problems.
Bank statement loans work for self-employed business owners who live in the property. DSCR loans ignore your personal income entirely and qualify you based on rental income alone.
The wrong choice costs you thousands in rate or kills your approval. Here's how to pick the right option for your Rosemead purchase or refinance.
Bank statement loans use 12 or 24 months of business or personal bank statements to calculate your income. Underwriters analyze deposits and apply a percentage (usually 50-75%) as qualifying income.
This works for self-employed borrowers buying a primary residence, second home, or investment property in Rosemead. You avoid tax returns, P&Ls, and CPA letters.
Credit minimums start around 620, though 680+ gets better pricing. Expect 10-20% down for owner-occupied homes and 20-25% for investment properties.
DSCR loans qualify you based on the rental property's income, not yours. Underwriters divide monthly rent by the monthly mortgage payment (including taxes and insurance) to get your ratio.
A DSCR of 1.0 or higher means the rent covers the payment. Some lenders approve ratios as low as 0.75, but you'll pay a rate premium.
Your personal income doesn't matter. You could show zero tax income and still qualify if the Rosemead property rents for enough. Most lenders require 20-25% down and 640+ credit.
The biggest difference is property use. Bank statement loans let you buy a home to live in. DSCR loans require you to rent the property out or already have a tenant in place.
Income verification separates them too. Bank statements analyze your business cash flow. DSCR loans use an appraisal's rental income estimate and ignore what you earn personally.
Rates vary by borrower profile and market conditions, but DSCR loans often price slightly better for strong rental properties. Bank statement loans cost more when your business has irregular deposits.
Choose bank statement loans if you're buying a home to live in or you want flexibility to use the property yourself. They're also better for mixed-use scenarios where you might occupy the property later.
Go with DSCR if you're buying a Rosemead rental and want to avoid showing personal income. This is critical for high earners who write off most income or investors with complex tax strategies.
The property decides for you most of the time. Primary residence or second home means bank statements. Pure rental investment means DSCR, especially if the rent easily covers the payment.
Yes, bank statement loans work for investment properties. But if you're not living there, DSCR loans usually make more sense because they ignore your personal income.
DSCR loans typically require 640+ credit. Bank statement loans start at 620 but price much better at 680 or higher.
Rates vary by borrower profile and market conditions. DSCR loans often price slightly better if the property has strong rental income and good DSCR.
No. Bank statement loans replace tax returns with 12-24 months of statements. DSCR loans skip personal income verification entirely.
You can refinance into a DSCR loan once the property becomes a rental. But you can't switch mid-application without restarting underwriting.