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in San Dimas, CA
Both bank statement loans and DSCR loans skip W-2 income verification, but they serve completely different borrowers. One qualifies you based on your business cash flow, the other on rental property income alone.
Most San Dimas borrowers choose bank statement loans for primary residences and DSCR for investment properties. Understanding which approach matches your situation determines whether you qualify at all.
Bank statement loans qualify self-employed borrowers using 12 or 24 months of business or personal bank deposits. Lenders analyze average monthly deposits, apply expense ratios, then calculate qualifying income without tax returns.
You can buy a primary residence, second home, or investment property with bank statements. Credit minimums start at 620, though most approvals happen at 660 or higher with 10-20% down.
DSCR loans qualify you based solely on rental income versus the mortgage payment. Lenders calculate the debt service coverage ratio by dividing monthly rent by the total housing payment including taxes and insurance.
Your personal income, employment, and tax returns don't matter. The property itself must cash flow at a 1.0 DSCR minimum for most lenders, though some approve 0.75 ratios with larger down payments.
Bank statement loans require you to prove personal or business income through deposits. DSCR loans never look at your income at all, only what the property generates in rent.
DSCR works exclusively for investment properties with rental income. Bank statement loans cover any property type, including the San Dimas home you plan to live in yourself.
Choose bank statement loans if you're self-employed and buying a home to live in. DSCR only works for investment properties, so it's not an option for primary residences.
For San Dimas rental properties, DSCR simplifies qualification if the numbers work. You avoid showing tax returns, explaining business deposits, or proving income sources. Bank statements make sense when rental income falls short but your business cash flow is strong.
Yes, bank statement loans cover investment properties. You'll qualify based on your business deposits rather than the property's rental income.
Rates vary by borrower profile and market conditions, but DSCR typically prices slightly higher than bank statement loans. Both run 1-2% above conventional rates.
Yes, expect 6-12 months of reserves for both programs. DSCR lenders often require reserves based on all financed properties you own.
DSCR never requires personal tax returns. Bank statement loans may ask for business returns to verify your ownership stake and deposit sources.
DSCR is simpler if your rental income covers the payment. Bank statements involve more documentation but work when property income falls short.