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in San Dimas, CA
Conventional loans serve primary homebuyers in San Dimas. DSCR loans serve real estate investors who need rental property financing.
The right choice depends entirely on how you'll use the property. Your employment status and income structure determine which path makes sense.
Conventional loans require W-2 income, tax returns, and good credit. Lenders verify your employment and calculate debt-to-income ratios.
You can put down as little as 3% on a primary residence. Rates are typically lower than investor products when you plan to live in the home.
These loans work well for San Dimas buyers purchasing a house to live in. They offer predictable terms and the backing of Fannie Mae or Freddie Mac.
DSCR loans qualify you based on rental income from the property itself. Lenders don't request your tax returns or verify your job.
The property must generate enough rent to cover the mortgage payment. We calculate the debt service coverage ratio by dividing monthly rent by the monthly mortgage payment.
Minimum down payment is typically 20-25%. These loans cost more than conventional financing but solve problems traditional lenders can't.
Conventional loans underwrite you as a borrower. DSCR loans underwrite the property as an investment.
If you have W-2 income and want to live in a San Dimas home, conventional wins on rate and down payment. If you're buying a rental or have complex income, DSCR opens doors that conventional closes.
Rates vary by borrower profile and market conditions. Expect DSCR rates to run 0.5-1.5% higher than conventional for similar credit and down payment.
Choose conventional if you're buying a primary residence with standard W-2 income. The rates and terms beat DSCR every time for owner-occupants.
Choose DSCR if you're an investor with 1099 income, own multiple properties, or want to avoid tax return scrutiny. It's built for landlords who need streamlined qualification.
I see investors try to force conventional loans on rentals when DSCR fits better. And I see house hackers miss out on conventional rates by defaulting to investor loans. Match the loan to the use case.
No. DSCR loans are for investment properties only. You must use conventional or other owner-occupant financing for homes you'll live in.
Conventional loans offer lower rates for comparable credit and down payment. DSCR rates run higher because they carry more lender risk.
Conventional requires PMI below 20% down. DSCR loans typically avoid MI but require larger down payments upfront.
Yes, through refinancing. If you move into the property as your primary residence, you can refinance to conventional for better terms.
DSCR often closes faster because it skips employment verification. No need to wait for VOEs or complicated income documentation.