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in San Fernando, CA
San Fernando investors and self-employed borrowers often can't qualify through traditional income verification. Both bank statement loans and DSCR loans solve this problem, but they're built for completely different scenarios.
Bank statement loans work for borrowers buying a primary residence or second home with inconsistent W-2 income. DSCR loans only finance investment properties and ignore your personal income entirely.
Bank statement loans use 12 to 24 months of personal or business bank deposits to calculate your income. Underwriters average your deposits and apply an expense ratio—typically 25% to 50%—to determine qualifying income.
This works for self-employed borrowers, gig workers, or business owners buying a home to live in. You need decent credit (usually 620+) and a down payment of at least 10%, often 15% or 20% depending on the lender.
Rates run 1% to 2% higher than conventional loans. You're paying for flexibility—no tax returns, no P&L statements, just your banking activity showing cash flow.
DSCR loans qualify you based on the rental property's income, not yours. Lenders calculate the debt service coverage ratio by dividing monthly rent by the mortgage payment (PITIA).
A DSCR of 1.0 means rent covers the payment exactly. Most lenders want 1.0 or higher, though some approve deals at 0.75 DSCR with higher down payments or rates.
These loans only work for investment properties—single-family rentals, small multifamily, even short-term rentals in some cases. Your personal income doesn't matter. Your W-2, tax returns, and debt-to-income ratio are irrelevant.
The biggest split: bank statement loans are for homes you live in; DSCR loans are for properties you rent out. If you're buying in San Fernando to occupy it, bank statement is your only option here.
Income verification is night and day. Bank statement loans still look at your ability to repay based on deposits. DSCR loans care only whether the rent covers the mortgage—your job, income, and employment history don't factor in.
Down payment requirements overlap but differ by deal. Bank statement loans start at 10%, sometimes 15%. DSCR loans typically require 20% to 25%, especially on cash-out refinances or properties with lower DSCR.
Choose bank statement loans if you're self-employed and buying a home to live in. This loan fits contractors, freelancers, business owners, or commission-based earners who can't document income through tax returns.
Choose DSCR if you're buying a rental property and want to avoid personal income verification. This works for investors with complex tax situations, retirees living on distributions, or anyone building a rental portfolio without hitting DTI limits.
In San Fernando, DSCR loans make sense for buyers targeting single-family rentals or small multifamily properties. Bank statement loans fit local business owners and self-employed residents buying primary homes in the area.
No. Bank statement loans are for primary residences and second homes only. Investment properties require a DSCR loan or another investor product.
Yes. Lenders order a full appraisal to confirm property value and estimate market rent, which determines your DSCR ratio.
Rates vary by borrower profile and market conditions. DSCR loans often price slightly better than bank statement loans due to lower perceived risk on cash-flowing properties.
Yes, if you meet each program's requirements. You might use a bank statement loan for your home and a DSCR loan for a rental property.
Both take 3 to 4 weeks typically. Bank statement loans require more document review; DSCR loans focus on appraisal and rent analysis.