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in San Gabriel, CA
San Gabriel's rental market draws both W-2 buyers and serious investors. The loan you choose depends on whether you're showing tax returns or rental income.
Conventional loans work great for primary homes and first rentals. DSCR loans exist for investors who want approval based on what the property earns, not what you report to the IRS.
Conventional loans require full income documentation. You'll show two years of tax returns, W-2s, and pay stubs to verify you can handle the payment.
Rates run lower than DSCR programs because lenders see less risk. You need 620+ credit for most deals, 740+ for the best pricing. Down payments start at 3% for owner-occupied, 15-25% for investment properties.
DSCR loans skip your personal income entirely. Approval hinges on one number: monthly rent divided by monthly mortgage payment (PITI). Most lenders want 1.0 or higher.
Expect rates 0.5-1.5% above conventional pricing. Minimum 20-25% down, sometimes more if the rental numbers are tight. Credit requirements sit around 680-700 for most programs.
The approval process looks completely different. Conventional underwriters comb through your job history and debt-to-income ratio. DSCR underwriters only care if the rent covers the mortgage.
Rate差 gap matters on a $800K San Gabriel duplex. A 1% higher rate costs you about $480/month. That's $5,760 annually—worth it if you can't qualify conventional but have strong rental income.
Go conventional if you're a W-2 earner buying your first or second rental. The rate savings compound over 30 years. You'll need steady employment and tax returns that support the payment.
Choose DSCR if you're self-employed, own multiple rentals, or write off so much income that conventional approval won't work. Also ideal when you want to scale past 10 financed properties or close fast without employment verification drama.
Most lenders accept an appraisal-based rent estimate if the property isn't occupied. They'll use market rents for comparable San Gabriel units to calculate your DSCR ratio.
Most programs require 1.0 minimum—rent equals the full mortgage payment. Some lenders go to 0.75 but charge higher rates and demand larger down payments.
Yes, typically 0.5-1.5% lower. Conventional loans carry less lender risk due to full income verification. Rates vary by borrower profile and market conditions.
You'd refinance into a conventional loan once you have qualifying income documentation. Makes sense if rates drop or your tax situation improves.
DSCR loans often close quicker—no employment verification or tax return reviews. Figure 21-30 days versus 30-45 for conventional with full underwriting.