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in San Gabriel, CA
San Gabriel investors and self-employed buyers often can't use traditional loans. Bank statement and DSCR loans solve different problems with different approval methods.
Bank statement loans verify your income through deposits. DSCR loans ignore your income entirely and focus on rental cash flow.
Both are non-QM products, which means faster underwriting and more flexible credit rules. The right choice depends on whether you're buying to live in the property or rent it out.
Bank statement loans let self-employed borrowers qualify using 12 or 24 months of business or personal bank deposits. Lenders calculate income by averaging your monthly deposits and applying an expense ratio.
This works for primary residences, second homes, and investment properties. You need decent credit—typically 620 minimum, though 680+ gets better pricing.
Most programs accept 10-20% down. Rates run 1-2% higher than conforming loans, but that's the trade-off for skipping tax returns and proving income your way.
DSCR loans qualify you based on whether the rental property covers its own mortgage payment. Lenders calculate debt service coverage ratio by dividing monthly rent by the monthly mortgage payment.
A ratio above 1.0 means the rent exceeds the payment. Most lenders want 1.0 or higher, though some accept 0.75 with larger down payments.
These loans work only for investment properties—not primary residences. You need 20-25% down and 660+ credit in most cases. Your personal income doesn't matter at all.
Bank statement loans verify your ability to pay from business or personal income. DSCR loans verify the property's ability to pay for itself through rent.
If you're buying a San Gabriel property to live in, bank statement is your only option. DSCR loans don't allow owner occupancy under any circumstances.
Bank statement loans require income documentation—your deposits need to show consistent cash flow. DSCR loans require a lease or rent schedule but zero proof of your personal earnings.
Down payments differ too. Bank statement programs start at 10% down for strong credit. DSCR loans require 20% minimum, often 25% if the rental income barely covers the payment.
Use a bank statement loan if you're self-employed and buying a home to live in. Also use it for investment properties when your deposits are strong but the rental numbers are tight.
Use a DSCR loan when you're buying purely as an investment and the rent clearly covers the mortgage. This works best for San Gabriel multi-family properties or single-family homes with established rental history.
If you own multiple rentals and your tax returns show losses from depreciation, DSCR loans make more sense. Your personal income won't help you qualify anyway.
Some borrowers qualify for both. In that case, compare rates and choose based on which documentation is easier to pull together quickly.
Yes. Bank statement loans work for investment properties as long as you can show consistent deposits. DSCR may offer better terms if the rent is strong.
Rates vary by borrower profile and market conditions. DSCR loans often price slightly better when the rental coverage is strong and you put 25% down.
No. Both are non-QM loans that skip tax return review. Bank statement uses deposits; DSCR uses rental income only.
No. DSCR loans prohibit owner occupancy entirely. Use a bank statement loan for live-in investment properties like duplexes.
Bank statement loans typically require 620 minimum. DSCR loans usually need 660 or higher, depending on down payment size.