Loading
in Rosemead, CA
Rosemead investors face a choice: use your W-2 income or let the property qualify itself. Conventional loans scrutinize your tax returns and debt ratios. DSCR loans ignore your personal finances entirely and approve based on rent.
The right choice depends on whether you're an owner-occupant or a landlord adding to your portfolio. Most first-time buyers use conventional. Most multi-property investors use DSCR.
Conventional loans offer the lowest rates and smallest down payments for qualified borrowers. You need documented income, 620+ credit, and a debt-to-income ratio under 50%. Most Rosemead primary residence buyers start here.
Down payments range from 3% for first-time buyers to 15% for investors with one rental property. Fannie Mae and Freddie Mac set the rules. Rates vary by borrower profile and market conditions but typically beat non-QM options by 1-2%.
DSCR loans approve based on a single number: monthly rent divided by monthly mortgage payment. If that ratio hits 1.0 or higher, you qualify. No W-2s, no tax returns, no explaining business write-offs that tank your taxable income.
Expect 20-25% down and rates 1.5-2.5% above conventional. This is not a budget option. It's a velocity option for investors who can't show enough personal income but have cash and good credit.
Income verification splits these loans apart. Conventional underwriters want two years of tax returns, pay stubs, and a full DTI calculation. DSCR lenders want a lease agreement and an appraisal with rent comps. That's it.
Pricing reflects risk. Conventional loans hit lower rates because Fannie and Freddie buy them in bulk. DSCR loans stay on portfolio lender balance sheets, so you pay a premium. The trade is speed and simplicity versus cost.
Use conventional if you're buying a primary residence or your first rental property. Your W-2 income qualifies you easily, and the rate savings compound over 30 years. You'll need clean tax returns and stable employment.
Use DSCR if you own multiple rentals, show low taxable income due to depreciation, or want to scale quickly. Each property stands alone. Your tenth rental won't hurt approval odds on your eleventh. Rosemead investors stacking duplexes and triplexes rely on DSCR for exactly this reason.
No. DSCR loans require the property to generate rental income. If you're living there, you need a conventional or FHA loan instead.
Conventional typically requires 620 minimum. DSCR lenders want 680 or higher due to the no-income-verification structure.
Divide monthly rent by the total monthly payment. A ratio of 1.0 means rent covers the mortgage. Most lenders want 1.0 to 1.25 minimum.
Yes. Investors convert to DSCR when adding properties maxes out their DTI on conventional loans. It frees up borrowing capacity.
DSCR often closes quicker because there's no employment verification or tax return review. Expect 2-3 weeks versus 3-4 for conventional.